Bunker benchmarks in most European and African ports have tracked Brent’s upward movement, and bad weather in Gibraltar could hamper bunkering.

PHOTO: View from the Rock of Gibraltar, UK to Algeciras, Spain. Getty Images

Changes on the day, to 09.00 GMT today:

• VLSFO prices up in Durban ($8/mt) and Rotterdam ($1/mt), and unchanged in Gibraltar 
• LSMGO prices up in Gibraltar ($10/mt), and Rotterdam and Durban ($7/mt)  
• HSFO prices up in Rotterdam ($10/mt) and Gibraltar ($3/mt) 

Rotterdam’s HSFO price has gained sharply in the past day, while its VLSFO price has risen modestly. The price moves have narrowed the port’s Hi5 spread from $112/mt to $103/mt now.

Gibraltar’s LSMGO price has gained the most compared to the other two grades in the port. Its LSMGO price rise has outpaced Rotterdam’s increase in the past day. This has widened Gibraltar’s price premium over Rotterdam by $3/mt to $98/mt now.  

In Algeciras, bunker prices across all grades have come down in the past day. Three non-prompt lower-priced stems were booked in Algeciras yesterday, one each for HSFO, VLSFO and LSMGO. These stems contributed to drag the port's benchmarks down. 

The port’s HSFO price has fallen the steepest compared to the other two grades, falling by $20/mt to $543/mt now. The sharp drop in HSFO price has flipped Algeciras' moderate price premium over Gibraltar to a $14/mt discount now.  

Rough weather is forecast in the Gibraltar Strait in periods between today and tomorrow. Wind gusts are forecast to intensify from 18-20 knots today to about 23 knots tomorrow, which could complicate bunker deliveries there. Seven vessels are waiting for bunkers in Gibraltar today, slightly up from five yesterday, a source said.

Brent

The front-month ICE Brent contract gained $0.90/bbl on the day, to trade at $89.12/bbl at 09.00 GMT.

Upward pressure:

Brent futures gained this week due to escalating geopolitical tensions in the Middle East.

Risks related to oil security grew after Israel ramped up airstrikes on southern Gaza’s Rafah region yesterday, Reuters reported.

A retaliation from Iran and its proxies will not be too surprising now, according to analysts.

Brent's price gained additional support from the US treasury secretary Janet Yellen's latest comments. Yellen told Reuters that the “weak” first quarter US gross domestic product (GDP) data may be revised higher. "The U.S. economy continues to perform very, very well," Reuters quoted Yellen as saying.

Downward pressure:

Brent's price felt some downward pressure as US economic data disappointed the oil market.

The US GDP recorded a growth rate of 1.6% in the first quarter of this year, while analysts expected a growth of 2.4%, Reuters reported.

The data led to expectations in the market that the US Federal Reserve (Fed) would not cut interest rates anytime soon. But Yellen's remarks waned those concerns. Higher interest rates in the US can potentially dampen demand for dollar-denominated commodities like oil.

Brent’s prices dropped in early morning trade as “US GDP data prompted stagflation concerns,” said Saxo Bank’s head of FX strategy Charu Chanana.

By Manjula Nair and Aparupa Mazumder

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