Bunker benchmarks in European and African ports have moved in mixed directions, and prompt bunker fuel availability is tight off Skaw. 

PHOTO: Aerial view of Durban Harbor. Getty Images

Changes on the day, to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($3/mt), unchanged in Durban, and down in Rotterdam ($6/mt) 
• LSMGO prices up in Durban ($13/mt) and Rotterdam ($7/mt), and down in Gibraltar ($5/mt) 
• HSFO prices up in Rotterdam ($15/mt), and down in Gibraltar ($3/mt)

Rotterdam's VLSFO price has dropped with support from a lower-priced stem. One 150-500 mt VLSFO stem for non-prompt delivery was fixed at $568/mt yesterday and has contributed to the dip in the benchmark. Conversely, Rotterdam’s HSFO price has gained steeply in the past day. The price moves have narrowed the port’s Hi5 spread from $94/mt yesterday to $73/mt now.  

Gibraltar’s VLSFO price has gained some in the past day, widening its VLSFO premium over Rotterdam's VLSFO by $9/mt to $48/mt now. In contrast, the port’s HSFO price has shed some in the past day. The diverging price moves have widened the port’s Hi5 spread from $71/mt to $77/mt now. 

All grades remain in tight supply at Skaw Offshore for the third consecutive week. Lead times have ranged between 10-14 days there, the trader said. Adverse weather conditions are forecast off Skaw today and may last until tomorrow, which could disrupt bunkering in the area.

Durban’s LSMGO price has gained in the past day. LSMGO availability is good in Durban, with most suppliers able to offer the grade for non-prompt delivery dates. A trader advises lead times of 7-10 days to ensure full coverage from suppliers. Wind gusts of up to 20 knots are forecast to hit Durban on Friday, which could complicate bunkering there. 

Brent

The front-month ICE Brent contract lost $0.99/bbl on the day, to trade at $84.18/bbl at 09.00 GMT.

Upward pressure:

Supply-related concerns have provided some support to Brent’s prices this week, with Ukraine ramping up drone attacks on Russian energy facilities.

On Wednesday, a Ukrainian drone struck the state-owned oil refiner Rosneft's refinery in Ryazan, western Russia, resulting in a fire, Bloomberg reported. The crude processing unit in Ryazan had only recently resumed operations following a prior strike.

The Ryazan refinery, with an annual oil processing capacity of 17.1 million mt, is one of the biggest refineries in Russia. The refinery has been regularly targeted by Ukrainian drones in recent months.

OPEC’s total oil production fell slightly by 100,000 b/d to 26.49 million b/d in April, according to a Reuters survey. This decline in production can be attributed to reduced exports from Iran, Iraq and Nigeria, as well as the ongoing voluntary production cuts by certain members within the broader OPEC+ alliance.

Downward pressure:

Brent futures extended recent losses amid signs of weaker demand after the US Federal Reserve maintained interest rates at 5.25-5.50% after its two-day policy meeting concluded yesterday. This decision marks the sixth consecutive meeting where the central bank has opted to keep interest rates unchanged.

Higher interest rates often dampen demand by increasing the cost of commodities like oil for non-dollar holders.

“Renewed jitters in the broader financial markets as US Federal Reserve chairman Jerome Powell confirmed expectations of higher-for-longer interest rates after the central bank’s two-day policy meeting on Wednesday also weighed on crude,” VANDA Insights' founder and analyst Vandana Hari said.

The US Energy Information Administration (EIA) reported a huge build in US crude stocks, supporting the “bearish” demand narrative. Commercial crude oil inventories in the US rose by 7.27 million bbls to 461 million bbls in the week ended 26 April – to its highest level since June 2023.

“Bearish inventory data from the Energy Information Administration (EIA) put further pressure on the [oil] market,” two analysts from ING Bank said.

By Manjula Nair and Aparupa Mazumder

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