Bunker benchmarks in European and African ports have declined with Brent’s values, and HSFO availability is still tight in Las Palmas.   

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($37/mt), Rotterdam ($27/mt) and Gibraltar ($24/mt)  
• LSMGO prices down in Gibraltar ($44/mt), Rotterdam ($20/mt) and Durban ($17/mt)
• HSFO prices down in Rotterdam ($30/mt) and Gibraltar ($17/mt)  
• Rotterdam’s B30-VLSFO was indicated at a $235/mt premium over its VLSFO

Rotterdam’s HSFO price has come down by a sharp $30/mt in the past day, outpacing Gibraltar’s HSFO price drop of $13/mt. These price moves have widened Rotterdam’s HSFO discount to Gibraltar by $13/mt to $53/mt now. Bunker availability in Rotterdam and in the wider ARA hub has improved slightly compared to last week, a trader told ENGINE. But lead times of 5–7 days are recommended for optimal coverage from suppliers. 

HSFO availability is still tight in the Canary Islands’ port of Las Palmas, a trader said. Recommended lead times have now stretched from 5–7 days to 7–9 days. Las Palmas’ HSFO price was trading at a premium over Gibraltar and Lisbon earlier this month, but has now swung to near-parity levels.

A higher-priced VLSFO stem booked for prompt delivery in Las Palmas has contributed to keep the benchmark steady. On the other hand, Gibraltar’s VLSFO price has plunged by $24/mt. These diverging price moves have widened Las Palmas’ VLSFO premium over Gibraltar by $25/mt to $29/mt now. Availability of VLSFO and LSMGO in Gibraltar and Las Palmas is good, with lead times of 3–5 days advised for both grades. 

Brent

The front-month ICE Brent contract has declined by $3.62/bbl on the day, to trade at $74.09/bbl at 09.00 GMT.

Upward pressure:

Brent’s price found some support from the decline in OPEC+ oil output. The 12 core OPEC members produced an average of 26.04 million b/d of crude oil in September, about 604,000 b/d lower than their combined production in August.

Crude oil production in Libya, Iraq, Nigeria and Saudi Arabia decreased last month, the Vienna-headquartered group said.

Oil production in Iraq, the group’s second-largest producer, declined by 155,000 b/d to 4.11 million b/d in September, while output in Libya fell by 410,000 b/d last month to 540,000 b/d, OPEC said.

“The OPEC report also showed that Iraq belatedly made progress to implementing its share of output cuts due since the start of the year,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Downward pressure:

Brent’s price plummeted following the latest comments from Israel that it may not target Iran’s oil infrastructure.

According to a Washington Post report, Israeli Prime Minister Benjamin Netanyahu has assured US President Joe Biden that the Israel Defense Forces (IDF) will target Tehran’s military infrastructure, rather than oil or nuclear facilities.

This news has suggested a more limited retaliation, rather than a full-scale war in the Middle East, and has eased some supply concerns, according to oil market analysts.

“Israel has assured the US that it will not strike crude oil or nuclear facilities in Iran,” two analysts from ING Bank said. “This has removed a big overhang for the oil market in the immediate term,” they added.

Lower crude oil imports from China, the world’s second-largest oil consumer, has also put downward pressure on Brent’s price. China imported 11.07 million b/d of crude oil in September, down from 11.56 million b/d imported in August.

“Chinese trade data yesterday has not helped [oil market’s] sentiment either,” ING Bank’s analysts said.

Meanwhile, Chinese economic stimulus announced over the weekend has not supported oil prices, analysts said. Chinese Finance Minister Lan Foan announced new measures, stating that Beijing would help local governments tackle debt and offer subsidies to people with low incomes, without mentioning the size of the fiscal stimulus.

“[Brent] crude oil prices sank as sentiment fell on the lack of new stimulus from China,” Hynes added.

By Manjula Nair and Aparupa Mazumder

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