Regional bunker benchmarks have fallen with Brent, and Gibraltar is witnessing slight congestion today. 

PHOTO: Gantry cranes at the Port of Hamburg. Hamburg Port Authority

Changes on the day, from Friday to 09.00 GMT today:

• VLSFO prices down in Rotterdam and Gibraltar ($6/mt), and Durban ($3/mt)  
• LSMGO prices down in Durban ($26/mt), Rotterdam ($22/mt) and Gibraltar ($18/mt) 
• HSFO prices up in Rotterdam ($1/mt), and down in Gibraltar ($2/mt)

Rotterdam's LSMGO price drop has outpaced that of Gibraltar's over the weekend. A lower-priced LSMGO stem fixed for prompt delivery at Rotterdam over the weekend has added downward price pressure on the benchmark.

LSMGO availability in the ARA hub has tightened slightly, with traders recommending lead times of 3-5 days for the grade, up from 2-4 days in the week before. 

One lower-priced prompt delivery LSMGO fixed at $732/mt in Antwerp on Friday has dragged the port's benchmark lower by $4/mt.

Rotterdam’s HSFO price has moved counter to the wider market direction and gained marginally over the weekend. The price moves have narrowed the port’s Hi5 spread from $126/mt on Friday to $119/mt now. 

Gibraltar is witnessing slight bunker congestion, with ten vessels waiting for bunkers today, up from seven on Friday, according to a source. Eight vessels are due to arrive for bunkers at nearby Ceuta port today, down from 11 on Sunday, says shipping agent Jose Salama & Co. 

Brent

The front-month ICE Brent contract lost $1/bbl on the day from Friday, to trade at $86.37/bbl at 09.00 GMT.

Upward pressure:

Despite Brent’s latest price drop, the benchmark has remained supported due to geopolitical tensions between Israel and Iran that have kept the oil market on its edge with supply concerns.

“[Oil] investors should pay close attention to oil prices as the war continues to evolve,” J. P. Morgan’s global market strategist Jack Manley said.

Oil market analysts continue to price in the chances of an Israeli airstrike in the future that could disrupt Iranian oil facilities. “Any further escalation would only bring the oil market closer to actual supply losses,” ING Bank’s head of commodities strategy Warren Patterson said.

The oil market has been beset with further supply-side risks. The US government reimposed oil sanctions on Venezuela after the country’s President Nicolás Maduro failed to fully meet the commitments made regarding holding fair presidential elections in the second half of this year.

This could potentially disrupt about 600,000 b/d of crude exports from Venezuela, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent futures decline today can be attributed to the de-escalation of conflict between Israel and Iran.

“Crude futures were on a slippery slope… as relative calm on the Israel-Iran front over the weekend started to chip away at the Mideast geopolitical risk premium in prices,” VANDA Insight’s founder and market analyst Vandana Hari said.

It seems that currently both Iran and Israel are downplaying the implications of the latest events, market analysts added.  

“Iran downplaying Israel’s attacks and showing no urgency to retaliate,” has put downward pressure on Brent’s price, Saxo Bank’s head of FX strategy Charu Chanana said in a note.

By Manjula Nair and Aparupa Mazumder

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