Regional bunker benchmarks have gained with Brent, and prompt availability across all grades is good in the ARA hub. 

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($13/mt) and Rotterdam ($12/mt), and down in Durban ($5/mt) 
• LSMGO prices up in Gibraltar ($19/mt), Durban ($17/mt) and Rotterdam ($10/mt)  
• HSFO prices up in Rotterdam ($18/mt) and Gibraltar ($12/mt)

Rotterdam’s HSFO price gain has outpaced its VLSFO price gain in the past day. As a result, the port's Hi5 spread has narrowed from $93/mt yesterday to $87/mt now. Rotterdam’s HSFO discount to Gibraltar has also narrowed by $6/mt to $60/mt now. 

All grades are normal in availability in Rotterdam and in the wider ARA hub. Most suppliers can offer all grades for prompt delivery dates. Lead times of 3–5 days are generally recommended for all three grades, a trader told ENGINE. 

Bunkering is proceeding smoothly in Gibraltar today, with two vessels currently waiting for bunkers in the port, down from three yesterday, according to a source. Nine vessels are due to arrive for bunkers in Ceuta today, said shipping agent Jose Salama & Co. 

HSFO supply off Malta has improved this week, a trader said. One HSFO supplier can offer the grade with lead times of 3–4 days compared to 4–6 days last week. VLSFO and LSMGO availability is also good with lead times of 3–4 days advised. Rough weather is forecast off Malta from today till Saturday, which may hamper bunkering, a source said.

Brent

The front-month ICE Brent contract has gained $1.66/bbl on the day, to trade at $74.45/bbl at 09.00 GMT.

Upward pressure:

Brent’s price moved higher after the US Federal Reserve (Fed) cut its key interest rate by a massive 50 basis points for the first time since 2020, bringing the central bank’s benchmark rate to a range between 4.75% and 5.00%.

Lower interest rates in the US can boost demand growth for dollar-denominated commodities like oil as it makes the greenback weaker against other currencies. Brent’s price moved into a “positive territory,” after the US Fed announced its rate cut, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Meanwhile, a drop in US crude stocks also supported the oil demand growth expectations in the world’s largest oil consuming nation. Commercial crude oil inventories in the US dropped by 1.63 million bbls to touch 418 million bbls on 13 September, according to the US Energy Information Administration (EIA).

Oil market traders are also closely monitoring geopolitical developments in the Middle East. Walkie-talkies and other hand-held pager devices used by Iran-aligned Hezbollah armed group detonated yesterday across southern Lebanon, Reuters reported.

The news of devices exploding has raised concerns of a wider Israel-Lebanon conflict in the oil-rich region, with the latter blaming the Israel Defense Forces (IDF) for the blasts.

“Tensions remain high after Iran-backed Hezbollah accused Israel of orchestrating an attack that killed several people,” Hynes added.

Downward pressure:

Brent’s price remains under some downward pressure due to concerns over slowing demand growth in China.

Chinese refiners processed about 59.07 million mt (13.91 million b/d) of crude oil in August, down 6.2% from the same period a year ago, market intelligence provider JLC reported citing data from China’s National Bureau of Statistics (NBS).

Additionally, the country’s oil imports also remain tepid. China imported 11.56 million b/d of crude oil last month, down from 12.43 million b/d imported in August 2023.

“China has obviously been the key concern when it comes to demand,” two analysts from ING Bank said.

By Manjula Nair and Aparupa Mazumder

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