Regional bunker benchmarks in European and African ports have declined with Brent, and LSMGO supply has normalised in Durban.  

PHOTO: A container ship being unloaded at a container terminal in Antwerp, Belgium. Getty Images

Changes on the day, to 09.00 GMT today:

• VLSFO prices unchanged in Gibraltar, and down in Durban ($6/mt) and Rotterdam ($1/mt) 
• LSMGO prices down in Durban ($131/mt), Rotterdam ($7/mt) and Gibraltar ($4/mt) 
• HSFO prices unchanged in Rotterdam and Gibraltar 

Some bunker suppliers in the ARA hub are facing supply delays for LSMGO. As a result, suppliers are now indicating lead times of 3-5 days for LSMGO, slightly up from the 2-4 days last week.

Antwerp's LSMGO price has shed $15/mt in the past day. One 50-150 mt lower-priced LSMGO stem fixed at $770/mt yesterday has supported the benchmark's decline.

In Algeciras, a lower-priced LSMGO stem booked for prompt delivery in the past day has triggered a fall of $9/mt in the benchmark. Its LSMGO discount to Gibraltar's LSMGO stands at $9/mt.

Seven vessels are waiting to receive bunkers in Gibraltar today, steady with yesterday's, according to a source. 

Durban's LSMGO prices have come down sharply by $131/mt as supply for the grade has improved. The port has struggled with LSMGO shortages in recent months, leading to supply issues where multiple suppliers were unable to offer the grade for prompt dates as well as for dates further out. Lead times of 7-10 days are advised by traders for the grade.

Brent

The front-month ICE Brent contract lost $0.39/bbl on the day, to trade at $89.68/bbl at 09.00 GMT.

Upward pressure:

Rising tensions between Israel and Iran are driving up Brent futures this week. Several financial institutes and analysts have adjusted their Brent crude price forecasts for the year following Iran's recent attack.

Oil traders are speculating on how Israel would respond to Iran's weekend attack, commented ANZ Bank’s senior commodity strategist Daniel Hynes. The Israeli army chief has indicated that Iran will bear the consequences for the attack. Any escalation from this point onward could disrupt crude movements in the region, causing more volatility in the oil market.

“Tightening fundamentals” from the ongoing OPEC+ production cuts and geopolitical risk premiums will push Brent’s prices during the summer season (April – September), Morgan Stanley’s head of European oil and gas research Martijn Rats said.

The bank raised its price forecast by $5/bbl to $95/bbl for the same period.

Downward pressure:

A stronger-than-expected build in US crude inventories dragged Brent’s prices lower this morning. US commercial crude inventories gained 4.1 million bbls in the week ended 12 April, according to the American Petroleum Institute (API).

Oil market analysts project a weekly stock build of around 1.65 million bbls. The widely followed US government data on crude oil stockpiles from the EIA is due later today.

API’s data was “somewhat bearish, with a larger-than-expected crude build overshadowing a drawdown in gasoline inventories,” said VANDA Insight’s founder and analyst Vandana Hari.

Brent futures shed further after the US Federal Reserve’s (Fed) chairman Jerome Powell reiterated in his speech that the central bank was still hesitant to cut interest rates anytime soon.

The oil market lost some gains after Powell’s remarks indicated that “interest rates may need to remain elevated for some time,” said SOPI Asset Management’s managing partner Stephen Innes. “The hawkish tone from Powell didn't come as much of a surprise, considering the persistent inflationary challenges,” he added.

Higher interest rates can dampen global demand by increasing the cost of commodities like oil for non-dollar holders.

By Manjula Nair and Aparupa Mazumder

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