Most bunker benchmarks in European and African ports have decreased, and adverse weather could impact bunkering in Gibraltar later this week. 

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 Rotterdam ($9/mt), and down in Durban ($7/mt) and Gibraltar ($4/mt)  
• LSMGO prices down in Durban ($83/mt) and Rotterdam and Gibraltar ($2/mt) 
• HSFO prices up in Rotterdam ($2/mt), and down in Gibraltar ($5/mt) 

Rotterdam's HSFO and VLSFO prices have countered the wider market direction and gained some over the weekend. A prompt higher-priced HSFO stem was booked in Rotterdam on Friday, which has pushed the benchmark higher. Securing prompt supply of HSFO can be difficult in Rotterdam and in the wider ARA hub, with traders recommending lead times of 4-6 days. 

A steeper rise in Rotterdam's VLSFO price has widened the port’s Hi5 spread from $96/mt on Friday to $103/mt now. Rotterdam’s VLSFO discount to Gibraltar has also narrowed by $13/mt to $35/mt now. 

Rotterdam’s LSMGO price has decreased some over the weekend. A lower-priced LSMGO stem was fixed for prompt delivery in Rotterdam on Friday. This has weighed on the benchmark. 

Bunkering is progressing normally in the Gibraltar Strait amid conducive weather conditions. However, weather-induced bunkering disruptions may arise on Wednesday when strong wind gusts of up to 29 knots are forecast in the area. 

Bunkering is also proceeding smoothly in the nearby Ceuta port, with no supplier delays reported. 11 vessels are due to arrive for bunkers in Ceuta today, up from 10 on Friday, according to shipping agent Jose Salama & Co. One vessel is currently waiting to bunker at anchorage. 

Brent

The front-month ICE Brent contract inched $0.04/bbl lower on the day from Friday, to trade at $83.76/bbl at 09.00 GMT.

Upward pressure:

Brent futures gained some upward thrust after ceasefire discussions between Israel and Hamas in Cairo faced obstacles. These talks faced a setback over the weekend, reigniting worries about the oil supply in the region.

“The talks ended with Hamas digging in its heels over its demand for a complete end to the war and Israeli Prime Minister Benjamin Netanyahu saying that doing so would amount to defeat,” VANDA Insights’ founder and analyst Vandana Hari remarked.

Brent prices also gained support as oil market analysts continued to bet on OPEC+ supply-cut extensions into the third quarter of this year.

“[Brent’s] losses were limited as the market contemplates OPEC extending its current output cuts,” ANZ Bank’s senior commodities strategist Daniel Hynes said.

Downward pressure:

Weak economic data from two major oil consumers in the world, the US and China, has heightened worries about global demand and capped the price gains of Brent futures in recent weeks.

Manufacturing Purchasing Managers' Index (PMI) reading in the US dipped to 49.2 in April after briefly expanding last month to 50.3, while China's manufacturing PMI dropped to 50.4 in April from 50.8 in March.

China's April manufacturing PMI remained above 50, but a month-on-month fall in the reading has raised some concerns about the country's economic health.

A PMI reading below 50 typically indicates weak economic health and a contraction in the manufacturing sector, which includes production and new orders.

Market watchers will closely monitor China’s first batch of trade data for April, including oil imports, which will be out on Thursday, two analysts from ING Bank said.

By Manjula Nair and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online