Most bunker benchmarks in European and African ports have risen with Brent, and the LSMGO supply is dry in Durban. 

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($8/mt) and Gibraltar ($6/mt), and down in Rotterdam ($13/mt)   
• LSMGO prices up in Rotterdam and Gibraltar ($8/mt) 
• HSFO prices up in Gibraltar ($7/mt) and Rotterdam ($6/mt)  
• Rotterdam B30-VLSFO at a $121/mt premium over VLSFO

Rotterdam’s VLSFO price has declined by a steep $13/mt in the past day, while its HSFO price has gone up. These diverging price moves have narrowed Rotterdam’s Hi5 spread from $40/mt yesterday to $21/mt now. VLSFO supply in the ARA hub remains tight but has improved compared to last week, a source said. Lead times of 5–7 days are advised for VLSFO in the ARA hub.

In the Canary Islands’ port of Las Palmas, HSFO remains in short supply for a few suppliers. A trader recommends lead times of 7-10 days for HSFO for optimal coverage from suppliers. Las Palmas' HSFO price is currently trading at a $41/mt premium over Gibraltar's. In contrast, VLSFO and LSMGO are well-stocked in Las Palmas, with recommended lead times of 3-5 days for both grades.

In South Africa’s Durban, one source reported that LSMGO supplies are running dry, while another mentioned that only one supplier currently has LSMGO available and is charging steep price premiums for it.

VLSFO supply is also tight in Durban as well as Richards Bay, with lead times of 7-10 days recommended.

Brent

The front-month ICE Brent contract has gained $0.93/bbl on the day, to trade at $73.80/bbl at 09.00 GMT.

Upward pressure:

Oil prices have moved higher on renewed supply jitters in the global oil market after Russia’s Foreign Minister Sergei Lavrov said that Moscow will now enter into a "new phase of Western war" after Ukraine used US-built long-range missiles on targets deep inside the Russian territory over the weekend.

With the onset of a new phase in the Ukraine-Russia conflict, oil prices are expected to gain momentum as supply concerns will keep traders on their toes.

Moreover, Russian President Vladimir Putin updated the country’s nuclear doctrine on Tuesday, establishing conditions under which Russia could strike from the world's biggest nuclear arsenal, Reuters reported.

Brent’s price moved higher after Putin approved an “updated nuclear doctrine expanding conditions for using atomic weapons,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

Downward pressure:

Brent’s price felt some downward pressure after the American Petroleum Institute (API) reported a bigger-than-expected rise in US crude stocks.

Crude oil inventories in the US surged by 4.7 million bbls in the week that ended 15 November, according to API. The weekly inventory build was much higher than market expectations of an 800,000-bbl rise during the week.

A rise in US crude stocks indicates weakness in oil demand, which can put downward pressure on Brent’s price.

Johan Sverdrup oil field in Norway has resumed operations after a power outage led to a halt in production on Monday, Reuters reported. This news has added some downward pressure on Brent.

The oil field produces around 755,000 b/d, “but will take some time to return to full capacity,” two analysts from ING Bank said.

By Manjula Nair and Aparupa Mazumder

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