Bunker benchmarks in most European and African ports have tracked Brent’s downward movement, and availability is tight for all bunker fuel grades off Skaw. 

PHOTO: View of the Port of Amsterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($15/mt), Gibraltar ($14/mt) and Rotterdam ($11/mt) 
• LSMGO prices down in Durban ($70/mt), Gibraltar ($23/mt) and Rotterdam ($17/mt) 
• HSFO prices down in Gibraltar ($10/mt) and Rotterdam ($9/mt)

Rotterdam’s LSMGO price has fallen considerably compared to declines in the other two grades in the port. A lower-priced LSMGO stem booked for prompt delivery in Rotterdam in the past day has added downward pressure on the benchmark. The port's LSMGO price is currently trading at its lowest level since 13 March.

Gibraltar’s LSMGO price decline has outpaced that of Rotterdam's LSMGO. The price moves have narrowed by $6/mt to $88/mt now. Availability is normal in Gibraltar, with lead times of 4-6 days advised for all grades, according to a trader. Wind gusts of up to 26–30 knots are forecast to hit Gibraltar and Ceuta tomorrow and may impact bunkering in the ports. Six vessels are currently waiting for bunkers in Gibraltar, down from seven yesterday, a source says. 

Bunker availability is very tight for all grades off Skaw, with supply mostly available for non-prompt delivery dates, a trader says. Lead times of up to two weeks are advised for all grades. 

Durban's LSMGO price has declined steeply for the third consecutive day. LSMGO supply has improved after some suppliers received replenishment cargoes, a trader says. LSMGO prices have witnessed severe fluctuations in recent months as supplies ran dry in the port. The grade's price spiked by around $200/mt in February this year. Prices are now reverting to January levels.

Brent

The front-month ICE Brent contract plunged $3/bbl lower on the day, to trade at $86.68/bbl at 09.00 GMT.

Upward pressure:

Brent futures continued to draw support from growing geopolitical tensions in the Middle East.

Oil market analysts are bidding on the chances of Israel's retaliation against the drone attack launched by Iran on 13 April. Any direct attack on Iranian oil facilities can put oil supplies under pressure and move Brent’s prices up again, analysts said.

“There's no denying that the Middle East remains a volatile region, akin to a powder keg resting atop smouldering embers,” said SPI Asset Management’s managing partner Stephen Innes.

Iran is OPEC’s third-largest crude oil producer with daily output slated above 3 million b/d, according to the group’s latest oil market report.

Downward pressure:

Brent futures plummeted after the US Energy Information Administration (EIA) reported a 2.74 million-bbl build in US commercial crude oil inventories to 459.99 million bbls on 12 April - the highest level since June last year.

“A bearish EIA inventory report appears to have been the perfect opportunity for investors to lock in profits after the recent gains,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

The American Petroleum Institute’s (API) inventory report a day earlier was also bearish, suggesting a lacklustre growth in oil demand in the world’s largest oil-consuming nation.

Israel's delay in retaliating against Iran's recent attack added additional downward pressure on Brent futures, according to analysts.

“The lack of an immediate response by Israel to Iran’s weekend attack has seen the market reduce its geopolitical risk premium,” Hynes added.

Brent futures have reverted to levels preceding the 1 April incident, when Israel struck Iran’s consulate in Syria, remarked Vandana Hari, founder and market analyst at Vanda Insights. This shift suggests that “the latest bout of risk premium from heightened Israel-Iran tensions has eroded,” she added.

By Manjula Nair and Aparupa Mazumder

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