Benchmarks in European and African ports have tracked Brent’s downward movement, and HSFO has tightened in the ARA hub. 

Changes on the day to 09.00 GMT today:

• VLSFO down in Durban ($16/mt), and Rotterdam and Gibraltar ($11/mt) 
• LSMGO prices down in Rotterdam and Gibraltar ($15/mt) 
• HSFO prices down in Rotterdam and Gibraltar ($8/mt) 
• Rotterdam B30-VLSFO premium over VLSFO down by $15/mt to $214/mt

Prompt HSFO availability is tight in Rotterdam and the wider ARA hub. Lead times for HSFO have stretched to 8-10 days from 5-7 days last week due to barge loading delays, a trader said. VLSFO is comparatively better, but remains tight for very prompt delivery dates, with recommended lead times of 5-7 days. Rotterdam’s VLSFO price dip has outpaced its HSFO price fall in the past day. These price moves continued to narrow the port’s Hi5 spread to multi-month lows. The port’s Hi5 spread is around $49/mt now, the lowest since 10 December last year. 

Lead times remain consistent with last week in Gibraltar, a trader said, recommending 5-7 days for optimal coverage from suppliers. Severe congestion continues in Gibraltar port today, with a backlog of 18 vessels, down from 24 vessels on Tuesday, according to port agent MH Bland. Rough weather conditions in the port area last week triggered the backlog causing severe congestion in the port. 

Meanwhile, the Hi5 spread in the Canary Islands’ port of Las Palmas has narrowed further this week and is currently at $14/mt, the lowest level this year. Rough weather conditions may complicate bunker deliveries in Las Palmas today, MH Bland said.

Brent

The front-month ICE Brent contract has declined by $1.95/bbl on the day, to trade at $69.92/bbl at 09.00 GMT.

Upward pressure:

Brent’s price found some support amid rising instability in the Middle East.

US President Donald Trump vowed to continue military strikes on Yemen-based Houthi armed group and warned that Iran would be held responsible for any attacks carried out by the group, which has disrupted shipping in the Red Sea.

Meanwhile, Israeli airstrikes in Gaza have killed at least 200 people, according to Palestinian health authorities, ending a ceasefire agreement in the region that began in January. This has heightened concerns about potential threats to oil supply, Reuters reported.

Oil prices were “pushed higher as the escalating tensions in the Middle East raised concerns renewed risks to supply in the region,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

Brent futures declined after Russia agreed to Trump's proposal for a temporary halt in attacks between Moscow and Kyiv on each other's energy infrastructure, Reuters reported. This development could lead to more Russian oil entering the global market.

Market watchers suggest that a potential ceasefire might ease sanctions on Russia, increasing oil supply and lowering prices. This expectation has put pressure on crude prices.

“Crude futures were extending… losses, albeit marginally… mostly in response to an initial breakthrough in the Ukraine war situation,” noted Vandana Hari, founder and analyst at VANDA Insights.

Meanwhile, US crude oil inventories rose by 4.6 million bbls in the week ending 14 March, according to American Petroleum Institute (API) estimates cited by Trading Economics. The increase far exceeded market expectations of a 1.2 million-bbl rise. A buildup in inventories typically signals weaker oil demand, which can put downward pressure on Brent's price.

“Crude futures were also feeling some pressure… from a bearish stocks report from the American Petroleum Institute,” Hari added.

By Manjula Nair and Tuhin Roy

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