European & African bunker benchmarks have declined with Brent values, and HSFO supply pressures have eased in the ARA.

PHOTO: Ships docked in the Port of Las Palmas, Gran Canaria, Spain. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($8/mt), Rotterdam and Gibraltar ($6/mt) 
• LSMGO prices down in Durban ($17/mt), Rotterdam ($14/mt) and Gibraltar ($10/mt) 
• HSFO prices down in Rotterdam and Gibraltar ($7/mt)

Rotterdam’s most recent HSFO price drop has erased its gains from the previous session. Availability of HSFO has improved in the ARA hub, a trader says. HSFO supplies were tight in the ARA for the last two weeks. Lead times have now been reduced from 5-7 days seen earlier this week to 4-6 days now. Recommended lead times for VLSFO and LSMGO remain unchanged, with a trader advising 4-5 days for VLSFO and 2-4 days for LSMGO.

Gibraltar is witnessing slight congestion with seven vessels currently waiting for bunkers, up from three yesterday, a source says. Lead times of 4-6 days are recommended for all bunker grades. Strong wind gusts of 27 knots are forecast in Gibraltar today, which may hamper bunkering in the port. Meanwhile, six vessels are due to arrive for bunkers in nearby Ceuta today, down from eight yesterday, says shipping agent Jose Salama & Co. 

Availability of HSFO and LSMGO grades in the Canary Islands’ port of Las Palmas is normal. Securing prompt delivery of VLSFO is difficult in Las Palmas as suppliers offer offering their earliest delivery dates for 20 April onwards.

Brent

The front-month ICE Brent contract has lost $1.07/bbl on the day, to trade at $89.73/bbl at 09.00 GMT.

Upward pressure:

Brent experienced price gains in the last two days due to the spillover effect of the Middle Eastern conflict, which heightened supply concerns in the global oil market.

A ceasefire negotiation between Israel and Hamas continued for its third consecutive day without resolutions on the table, according to reports.

On Tuesday, a senior commander from the Iranian Navy said that Iranian forces could close critical trade routes such as the Strait of Hormuz, Gulf of Oman, and Aden, state-owned media agency IRNA reported. “This [news] should keep the risk of disruption to oil supply high,” ANZ Bank's senior commodity strategist Daniel Hynes commented.

“The extension of OPEC+ supply cuts until June-end also exerted upward pressure on Brent's prices as the market entered the second quarter of the year," Hynes added.

“Oil is on the rise as the headlines blast that the oil market is going to get extremely tight in the second half of the year and that OPEC has regained control of the oil market,” Phil Flynn, senior market analyst at Price Futures Group, remarked.

Downward pressure:

A bearish inventory report from the American Petroleum Institute (API) led to some downward pressure on Brent’s price this morning.

According to API’s data, US commercial crude inventories surged by 3 million bbls in the week ended 5 April. Oil market analysts had anticipated an increase of 2.4 million bbls for the week.

“Numbers released by the American Petroleum Institute (API) overnight were bearish for the oil market,” stated two analysts from ING Bank. “If confirmed by the Energy Information Administration (EIA), this would be the third weekly expansion in a row," they added.

Oil market analysts are currently awaiting US Consumer Price Index (CPI) data, followed by minutes from the US Federal Reserve's (Fed) latest Federal Open Market Committee (FOMC) meeting.

Analysts expect the Fed to maintain interest rates unchanged due to persistent inflationary pressures. Higher interest rates can dampen global demand as they increase the cost of commodities like oil for non-dollar holders.

By Manjula Nair and Tuhin Roy

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