Fuel prices in European and African ports have plunged tracking Brent’s downward movement, and bunkering operations are suspended at Huelva and off Malta.

IMAGE: Oil storage tanks in the oil and bunkering hub of Rotterdam, Netherlands. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($22/mt), Gibraltar ($21/mt) and Rotterdam ($12/mt)
• LSMGO prices down in Rotterdam ($27/mt) and Gibraltar ($22/mt)
• HSFO prices down in Durban ($44/mt), Gibraltar ($19/mt) and Rotterdam ($15/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $12/mt to $226/mt

Conventional fuel prices in Rotterdam, Gibraltar and Durban have declined significantly, undoing all minor gains achieved earlier this week.

Durban's HSFO price has recorded the steepest decline, at $44/mt.

Rotterdam's LSMGO price has also seen a drastic fall of $27/mt on the day. The grade's availability is very tight in the ARA hub, a trader told ENGINE.

The number of vessels awaiting bunkers in Gibraltar has increased to 10 today, from seven yesterday, port agent MH Bland said. The delays are caused due to a lack of space for vessels as well as limited bunker barge availability.

Algeciras continues to face congestion today. The port authority has advised suppliers to use the Delta anchorage for bunker calls.

Bunkering operations have been suspended in Huelva since this morning. Bunker deliveries off Malta are also suspended today due to bad weather, according to MH Bland.

Brent

The front-month ICE Brent contract has declined by $2.68/bbl on the day, to trade at $63.66/bbl at 09.00 GMT.

Upward pressure:

The latest US economic data has turned out to be positive for global markets and has lent some support to oil.

The US inflation rate, based on the Consumer Price Index (CPI), increased to 2.3% year-on-year last month, down from the 2.4% growth seen in March, according to the US Bureau of Labor Statistics (BLS). 

Oil prices have reacted positively to the cooler-than-expected US inflation data as it opens the window for interest rate cuts by the US Federal Reserve (Fed) this year, according to analysts.

“The US markets are on fire after a much better than expected consumer price index (CPI),” Price Futures Group’s senior market analyst Phil Flynn said.

Lower interest rates in the US can boost demand, making dollar-denominated commodities like oil cheaper for holders of other currencies.

Downward pressure:

Brent futures have declined amid signs of improving dialogue between the US and Iran, according to media reports.

Tehran has agreed to sign a nuclear deal with Washington in exchange for lifting economic sanctions, Ali Shamkhani, a political adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei, said in an interview with NBC TV.

“Trump kept up pressure on Iran, warning Tehran it can’t have nuclear weapons,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked. The improvement in truce talks “comes a day after he [Donald Trump] said that he’ll drive its oil exports to zero if a nuclear agreement can’t be reached,” Hynes said.

Besides, Brent’s price fell on concerns of weaker demand, after the weekly official US oil stocks figures from the US Energy Information Administration (EIA) were released yesterday.

Commercial US crude oil inventories increased by 3.5 million bbls to touch 442 million bbls for the week ending 9 May, according to data from the EIA. A buildup in inventories typically signals weaker oil demand, which can put downward pressure on Brent's price.

“Crude futures accelerated their slide early Thursday after a larger-than-expected weekly build in US commercial crude inventories ended a four-session winning streak,” VANDA Insights’ founder and analyst Vandana Hari said.

By Samantha Shaji and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online