Regional bunker benchmarks have tracked Brent’s downward movement, and Gibraltar port closed amid bad weather conditions. 

PHOTO: A cruise ship in the Port of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($24/mt), Rotterdam ($15/mt) and Gibraltar ($7/mt) 
• LSMGO prices down in Durban ($23/mt), Gibraltar ($13/mt) and Rotterdam ($10/mt) 
• HSFO prices down in Rotterdam ($9/mt) and Gibraltar ($4/mt)

Rotterdam’s VLSFO price drop has been slightly steeper compared to price drops in the other two grades. A lower-priced 500–1,500 mt prompt delivery VLSFO stem fixed yesterday at $588/mt has supported the fall in the benchmark. Unlike Rotterdam's VLSFO, the port's HSFO price has shed $9/mt in the past day, narrowing its Hi5 spread from $108/mt yesterday to $102/mt now. 

Gibraltar port has suspended all operations since yesterday afternoon amid adverse weather conditions, a trader tells ENGINE. The Gibraltar Port Authority has issued a gale-force wind warning effective until tonight, with strong wind gusts of up to 38 knots expected today. 

Lead times of 5-7 days are recommended for all grades there, a trader said. Around 13 vessels are waiting for bunkers in Gibraltar today, up from five yesterday, a source says. 

Bunker barge SPABunker Cuarenta has halted operations in the nearby port of Ceuta since yesterday because of bad weather conditions, says shipping agent Jose Salama & Co. Congestion has also increased in the port, with 14 vessels due to arrive for bunkers today, up from five yesterday, the shipping agent added. Wind gusts of 39 knots are forecast to hit Ceuta today and will fluctuate between 21-50 knots for the rest of this week.

Brent

The front-month ICE Brent contract moved $1.46/bbl lower on the day, to trade at $85.20/bbl at 09.00 GMT.

Upward pressure:

Members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are scheduled to meet on 3 April to discuss their output policies for the remainder of the year. Announcement of this meeting has contributed to Brent’s upward movement today.

Analysts anticipate members of the OPEC+ group to maintain their production levels at the upcoming meeting.

“Investors have purchased oil at the fastest rate for more than four years, amid optimism that Saudi Arabia and its OPEC+ allies will continue to restrict production while an improving economic outlook boosts consumption,” Reuters’ oil market analyst John Kemp commented.

Brent futures gained more support after Israel's Prime Minister Benjamin Netanyahu refused to participate in ceasefire talks with Hamas.

“Ceasefire talks between Israel and Hamas broke down again, with Israeli Prime Minister Benjamin Netanyahu accusing the group of extreme demands,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

Downward pressure:

Brent futures shed previous day's gains amid concerns over sluggish demand in the US.

US commercial crude inventories increased by 9.3 million bbls in the week ended 22 March, according to the American Petroleum Institute (API) data cited by Trading Economics. The surge in crude inventories suggests slow demand growth in the world’s largest oil-consuming nation, which could put downward pressure on Brent’s price.

“A sharp rise in U.S. crude inventories and expectations for a potential inaction by OPEC+ in its output policy next week saw further unwinding in oil [Brent] prices in today’s session, as profit-taking accelerates following a strong rally in mid-March,” IG Markets’ market strategist Jun Rong Yeap remarked.

By Manjula Nair and Tuhin Roy

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