Most bunker benchmarks in European and African ports have tracked Brent’s upward thrust, and bad weather could impact bunkering off Malta.

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 up in Gibraltar ($8/mt), Rotterdam ($6/mt), and Durban ($4/mt)  
• LSMGO prices up in Durban ($5/mt) and Gibraltar ($2/mt), and down in Rotterdam ($1/mt)  
• HSFO prices up in Rotterdam ($11/mt), and Gibraltar ($7/mt)

Most regional bunker benchmarks have gained some in the past day. But Rotterdam's LSMGO price has fallen slightly in the past day. One lower-priced LSMGO stem fixed at $721/mt in Rotterdam earlier today has somewhat prevented the benchmark from gaining.

Rotterdam's HSFO price gains have been steeper compared to its VLSFO price gains. The price moves have narrowed Rotterdam’s Hi5 spread from yesterday's $119/mt to $114/mt now. 

In Antwerp, a 150-500 mt higher-priced LSMGO stem was fixed at $732/mt for non-prompt delivery in the past day. This has pushed the LSMGO price higher in the port by $19/mt to $750/mt now. The price gains have erased Antwerp's LSMGO discount of $4/mt to Rotterdam's LSMGO and flipped to a $16/mt premium now.

One lower-priced VLSFO stem booked off Malta yesterday for non-prompt delivery has contributed to a dip of $2/mt in the benchmark, which is now priced at $628/mt. The price moves have widened Malta’s VLSFO discount to Gibraltar's by $10/mt to $18/mt now. 

Off Malta, rough weather is forecast intermittently this week, with wind gusts ranging between 22-32 knots expected to hit the region in periods. Rough weather conditions may disrupt bunkering in the area. 

Nine vessels are waiting to receive bunkers in Gibraltar today, down from 10 yesterday, according to a source. Calm weather is forecast in the Gibraltar Strait this week, making it conducive for bunkering.

Brent

The front-month ICE Brent contract gained $1.04/bbl on the day, to trade at $87.41/bbl at 09.00 GMT.

Upward pressure:

Brent futures have risen due to ongoing geopolitical tensions in the Middle East.

“The geopolitical backdrop is still very fraught with so many risks at the moment, so clearly we're going to see a lot of volatility until there's a lot more clarity around it," according to ANZ analysts.

The possibility of supply disruptions looms as sanctions on Iranian oil remain a key concern, market analysts said. The US already has oil sanctions in place against Iran.

Lawmakers in Washington are “considering a bill called the Iran-China Energy Sanctions Act,” ING Bank’s head of commodities strategy Warren Patterson said. This bill aims to restrict Iranian oil flows to China.

Heightened tensions in eastern Europe following the US House of Representatives vote in favour of a $61 billion aid package for Ukraine, which will be used to arm its military, has added uncertainty to the global oil market and contributed to supply concerns.

“The Kremlin's response to the promise of new aid to the country Russia is attempting to conquer (Ukraine) could heighten tensions further,” SPI Asset Management’s managing partner Stephen Innes commented.

Downward pressure:

A stronger-than-expected build in US crude inventories has exerted downward pressure on Brent’s price this week.

Commercial crude oil inventories in the US rose by 2.74 million bbls to 459.99 million bbls on 12 April - highest level since June last year, according to the US Energy Information Administration (EIA).

Market analysts are now awaiting the release of US gross domestic product (GDP) figures and March's personal consumption expenditure data, recognised by the Fed as an inflation indicator. Both datasets will be crucial for evaluating the Fed’s path of monetary policy, which could impact oil demand in the country.

By Manjula Nair and Tuhin Roy

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