Most regional bunker benchmarks have risen with Brent values, and bunker fuel supply is normal in Gibraltar.

PHOTO: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($9/mt), Gibraltar ($8/mt) and Durban ($6/mt)
• LSMGO prices up Rotterdam ($19/mt) and Durban ($15/mt), and down in Gibraltar ($14/mt)
• HSFO prices up in Rotterdam ($4/mt), and down in Gibraltar ($15/mt)

Gibraltar’s HSFO price has come down in the past day, while the grade’s price in Rotterdam has increased some. The diverging price moves have narrowed Gibraltar’s HSFO premium over Rotterdam by $19/mt to $54/mt now. A lower-priced HSFO stem fixed in Gibraltar in the past day contributed to drag the benchmark down.

Availability of all bunker fuel grades is said to be normal in Gibraltar. Recommended lead times have been reduced slightly, from around seven days last week to 4-6 days now, according to a source. Strong wind gusts of up to 30 knots are forecast in Gibraltar this week, which could complicate bunker deliveries. Two vessels are currently waiting to receive bunkers there.

Bunker fuels supply is also normal for deliveries off Malta. However, the port’s HSFO price is at a $34/mt premium over Gibraltar. Availability of HSFO and LSMGO grades in the Canary Islands’ port of Las Palmas is said to be normal. Its HSFO price is at a $45/mt premium over Gibraltar.

Tracking sharp gains in Brent futures, bunker fuel prices across all grades have increased in Rotterdam in the past day. Availability of HSFO has improved in the ARA hub from last week. Lead times of 5-7 days are advised for HSFO there, 4-5 days for VLSFO and 2-4 days for LSMGO.

Brent

The front-month ICE Brent contract has climbed $1.07/bbl higher on the day, to trade at $90.80/bbl at 09.00 GMT.

Upward pressure:

Brent has surpassed $90/bbl this week amid heightened geopolitical tensions in the Middle East and fears of supply disruptions.

Iran has threatened to restrict access to the Strait of Hormuz in retaliation for recent Israeli attacks on Syria. “The Strait of Hormuz is the world's most important oil chokepoint because large volumes of oil flow through the strait,” the US Energy Information Administration (EIA) said. Around 20% of global oil supply transits through this strait daily, according to the EIA, and disruptions could have severe knock-on impacts on the global oil market.

“We remain bullish on oil but don’t expect it to reach $100,” energy-focused hedge fund investor Eric Nuttall told Bloomberg. He argues that the oil market is “fundamentally tight” as demand remains strong despite concerns over the US economy, that US shale supply growth is under pressure, while OPEC+ is cutting supply.

Downward pressure:

Commercial crude oil inventories in the US grew by 5.84 million bbls on the week to 457 million bbls on 5 April, according to the EIA. This is its highest level since July last year.

US consumer price inflation strengthened in March, according to the latest Consumer Price Index data that was released on Wednesday by the Bureau of Labor Statistics. The tug of war between rising inflation in the US and the Federal Reserve's interest rate dilemma remains a metaphorical chink in Brent's armour.

Higher consumer price inflation in the US could lead the Federal Reserve to delay interest rate cuts, which could contribute to dent oil demand in the US.

By Shilpa Sharma and Konica Bhatt

Please get in touch with comments or additional info to news@engine.online