Most regional bunker benchmarks have gained with Brent, and Ceuta is witnessing bunkering delays at one of the terminals. 

PHOTO: Aerial view of a cargo ship in transit in Istanbul, Turkey. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($9/mt), and down in Durban ($11/mt) and Gibraltar ($3/mt) 
• LSMGO prices up in Gibraltar ($15/mt), Rotterdam ($14/mt) and Durban ($8/mt)
• HSFO prices up in Gibraltar ($4/mt), and down in Rotterdam ($19/mt)

Rotterdam’s HSFO price has run counter to the general market direction and declined sharply in the past day. Two lower-priced HSFO stems booked for non-prompt delivery in the past session have pushed the benchmark higher. In contrast, Rotterdam’s VLSFO price has gained some in the past day. These diverging price moves have widened the port’s Hi5 spread from $43/mt yesterday to $71/mt now. 

Gibraltar’s VLSFO price has dropped slightly in the past day. A lower-priced prompt delivery VLSFO stem fixed at $567/mt for 500–1500 mt has dragged the benchmark down. The price moves have narrowed Gibraltar’s VLSFO premium over Rotterdam by $12/mt to $15/mt now. 

Bunkering is currently proceeding smoothly in nearby Ceuta, with 12 vessels due to arrive for bunkers today, up from eight yesterday, according to shipping agent Jose Salama & Co. A supplier is experiencing 3–4 hours of delay in one of the terminals for the second consecutive day. These delays are because of dredging operations taking place in the port area. The port authority has been carrying out the dredging work to increase draft capacity to around 14.5 meters, according to a LinkedIn update by the Port of Ceuta authority. 

Brent

The front-month ICE Brent contract has moved $1.35/bbl higher on the day, to trade at $82.22/bbl at 09.00 GMT.

Upward pressure:

Brent moved higher after the OPEC Secretariat confirmed that Russia, Iraq, and Kazakhstan submitted compensation plans for producing above their crude oil quotas in the first half of 2024. These countries will balance their excess production over the next 15 months, concluding in September 2025.

Commercial crude oil inventories in the US decreased by 3.74 million barrels to 436 million barrels in the week ending July 19. The decline in stocks occurred amid an increase in US crude oil exports, which rose by 222,000 barrels per day to 4.19 million barrels per day that week. This has put upward pressure on the Brent price.

Canadian wildfires are threatening oil production, contributing to rising prices. Imperial Oil has reduced non-essential staff at its Kearl oil sands site near Fort McMurray as a precaution. Earlier this month, Suncor temporarily cut production and evacuated non-essential workers from its Firebag site due to a nearby fire. With two-thirds of Canada’s five million barrels per day production coming from the oil sands, analysts are increasingly concerned about significant production cuts due to the worsening wildfire situation.

“While wildfires have already forced some producers to curtail production, these fires still threaten a large amount of supply,” Reuters quoted ING Group analysts.

Downward pressure:

Expectations of a Gaza ceasefire deal, which could ease Middle East tensions and alleviate supply concerns, have put downward pressure on the Brent crude price.

US Vice President Kamala Harris has urged Israeli Prime Minister Benjamin Netanyahu to assist in reaching a ceasefire, taking a firmer stance than President Joe Biden.

Additionally, concern about oil demand in China has further dragged the benchmark down. China's apparent oil demand fell by 8.1% year-on-year to 13.66 million b/d in June, according to ANZ Research analysts.

By Manjula Nair and Tuhin Roy

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