Most regional bunker benchmarks have gained with Brent values, and bad weather in Gibraltar could hamper bunkering today. 

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

Changes on the day, to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($7/mt), Durban ($5/mt) and Gibraltar ($3/mt) 
• LSMGO prices up in Gibraltar ($2/mt), and down in Durban ($6/mt) and Rotterdam ($4/mt) 
• HSFO prices up in Rotterdam ($7/mt) and Gibraltar ($4/mt)

Rotterdam’s LSMGO price has countered the wider market direction and defied Brent’s upward pull in the past day. Two lower-priced stems booked for prompt delivery in the port have added downward pressure on the benchmark. The price movement has widened Rotterdam’s LSMGO discount to Gibraltar by $6/mt to $94/mt now.

In Antwerp, a prompt lower-priced LSMGO stem fixed at $732/mt for 50-150 mt has led to a steep $15/mt fall in the benchmark, which stands at $750/mt now.

Gibraltar is forecast to experience bad weather conditions, which could hamper bunkering there. Strong wind gusts of 29 knots are forecast to hit the port today. Seven vessels are currently waiting for bunkers in Gibraltar, up from six yesterday, according to a source.  

A lower-priced prompt VLSFO stem was booked for $629/mt for 150-500 mt in Algeciras yesterday. The stem has contributed to drag the port's benchmark down by $14/mt to $636/mt. The price movement has erased Algeciras’ premium over Gibraltar, which has now flipped to a discount.

Brent

The front-month ICE Brent contract gained $0.69/bbl on the day, to trade at $87.37/bbl at 09.00 GMT.

Upward pressure:

Brent futures reversed yesterday’s losses after geopolitical concerns resurfaced and war risk premiums once again sparked supply concerns in the global oil market.

Israel allegedly struck a nuclear facility in the Iranian city of Isfahan with a missile yesterday in a retaliatory move, according to several media reports. However, the news remains unconfirmed as the Israeli Defense Forces (IDF) have not claimed any attack.

If confirmed, these reports could raise concerns about the possibility of supply risks translating into actual disruptions, commented ING Bank’s head of commodities strategy Warren Patterson.

“The market has been on edge since Iran launched a missile and drone attack on the Jewish state over the weekend,” said ANZ Bank’s senior commodity strategist Daniel Hynes. “Israel’s response could determine whether oil supplies are ultimately under threat,” he added.

Downward pressure:

Downward pressures acting on Brent today arise from lacklustre demand growth indications after the US Energy Information Administration (EIA) reported an increase in crude oil stocks.

US commercial crude oil inventories increased by 2.74 million bbls to 459.99 million bbls on 12 April – the highest level since June last year, the EIA reported.

The inventory gain was “larger-than-anticipated,” said SPI Asset Management’s managing partner Stephen Innes. “The clear read-through is that [oil] demand is not as rosy as thought and that demand destruction, due to soaring prices at the pump, could be setting in even as we head for summer driving season,” he added.

By Manjula Nair and Aparupa Mazumder

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