Bunker benchmarks in European and African ports have declined with Brent, and prompt HSFO has tightened in Rotterdam. 

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($7/mt), Gibraltar ($5/mt) and Rotterdam ($4/mt)
• LSMGO prices down in Rotterdam ($10/mt), Durban ($8/mt) and Gibraltar ($6/mt)
• HSFO prices down in Gibraltar and Rotterdam ($4/mt)

HSFO and VLSFO availability has tightened in Rotterdam and in the wider hub amid product loading delays at terminals, a trader told ENGINE. Lead times have stretched from 3–4 days to 5–10 days as several barges are stuck in long queues awaiting product loading, two sources confirmed.

Prompt HSFO supply is relatively tighter in Rotterdam, leading to a significant price increase of $41/mt over the past week. VLSFO price has also risen, though more moderate, increasing by $20/mt during the same period. As a result, the port's Hi5 spread has narrowed from $84/mt to $63/mt on the week - the narrowest since July.

Rotterdam’s LSMGO price has fallen by a sharp $10/mt in the past day amid downward pressure from a 150-500 mt lower-priced stem fixed at $645/mt in Rotterdam.

Bunkering may be impacted in Gibraltar today as wind gusts of up to 20 knots are forecast in the area. These adverse weather conditions are forecast to continue till tomorrow, according to a source. More vessels are seeking to bunker in nearby Ceuta.

A total of 13 vessels are due to arrive for bunkers in Ceuta today, up from six yesterday, said shipping agent Jose Salama & Co. 

In Angola’s Luanda, a state-run bunker supplier which halted VLSFO supply in August is yet to provide an update on when the supply of the grade will resume. As a result, Namibia’s Walvis Bay is seeing “some spillover demand from Angola”, Monjasa’s trading manager Simone Piredda told ENGINE. Availability is decent in Walvis Bay, Piredda added.

Brent

The front-month ICE Brent contract has lost $0.61/bbl on the day, to trade at $74.56/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has found some upward pressure following a significant escalation in the conflict in the Middle East.

Iran launched over 180 missiles across Israel on Tuesday, the Israel Defense Forces (IDF) claimed. The Iranian attack came just days after Israeli military actions in Beirut, which resulted in the deaths of senior Hezbollah leader Hassan Nasrallah and other prominent leaders of the Iran-aligned militant group.

Israeli Prime Minister Benjamin Netanyahu has vowed to retaliate to Tehran’s airstrike. “Iran made a big mistake tonight [Tuesday] - and it will pay for it,” he said in an official statement on social media platform X (formerly Twitter).

As the OPEC member nation's direct involvement in the Middle Eastern tension opens the door to a wider regional conflict, oil market analysts and traders await Tel Aviv’s response.

“Broader markets, including oil, continue to wait and see how Israel responds to Iran’s recent missile attack,” two analysts from ING Bank said. “There are suggestions that Iranian oil infrastructure could potentially be targeted,” they added.

Downward pressure:

Brent’s price felt downward pressure after the US Energy Information Administration (EIA) reported an unexpected rise in crude stockpiles, contrary to market expectations of a drawdown.

Commercial crude oil inventories in the US increased by 3.89 million bbls to touch 417 million bbls on 27 September, the EIA reported. “[The] swelling US inventories added evidence that the market is well supplied and can withstand any disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Besides, Brent’s price moved lower after manufacturing PMI in the US, the world's largest oil consumer, came in below expectations in September.

The US Manufacturing Purchasing Managers' Index (PMI) reading stood at 47.2% in September, unchanged from the previous month, the Institute for Supply Management (ISM) reported.

A PMI reading below 50 typically indicates weak economic health and a contraction in the manufacturing sector, which includes production, inventory levels, new orders, etc. It also highlights demand growth concerns, ultimately weighing down on prices of commodities like oil.

By Manjula Nair and Aparupa Mazumder

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