Prices in European and African ports have mostly gained, and prompt supply of all fuel grades remains tight in the ARA hub.

IMAGE: Aerial view of the Port of Ceuta, Spain. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($7/mt), Gibraltar ($3/mt) and Durban ($1/mt)
• LSMGO prices up in Rotterdam ($7/mt), and down in Gibraltar ($4/mt)
• HSFO prices up in Rotterdam ($3/mt), and down in Gibraltar ($2/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $9/mt to $233/mt

Consistent with the past few weeks, prompt delivery of all fuel grades in the ARA hub remains challenging, with lead times unchanged at 7-8 days, a trader told ENGINE.

Rotterdam’s B30 VLSFO premium over the port’s VLSFO price has widened in the past day, according to data from ENGINE.

Gibraltar's LSMGO price has come down by $4/mt, while the grade's price in Rotterdam has increased some. The diverging price moves have narrowed Gibraltar’s LSMGO premium over Rotterdam by more than $10/mt in the past session, to $87/mt now.

As of today, there are nine vessels awaiting bunkers at Gibraltar, port agent MH Bland said. Limited barge availability and a lack of space for vessels are the main reasons causing the congestion at the port. Some suppliers in the port are experiencing delays of more than 24 hours. The weather in Gibraltar is expected to remain suitable for bunkering for the rest of the week.

Meanwhile, suppliers in Algeciras are running 2-12 hours behind schedule, according to MH Bland.

In Ceuta, one supplier is running 8-10 hours behind schedule at the anchorage. According to shipping agent Jose Salama & Co, there are four vessels in queue for space at the berth and 13 vessels are expected to arrive for bunkers today.

Brent

The front-month ICE Brent contract has risen by $0.67/bbl on the day, to trade at $65.49/bbl at 09.00 GMT.

Upward pressure:

Brent futures have risen amid concerns over potential supply disruptions from Canadian wildfires and expectations that Iran will reject a US nuclear deal proposal aimed at easing sanctions on the major oil producer.

“Wildfires in Alberta, Canada, provided a boost to prices,” noted two analysts from ING Bank.

Despite a temporary relief due to wet weather, market participants still expect the wildfires—burning across Canada since May—to impact supply.

“However, this relief could be short-lived amid forecasts for drier and warmer weather towards the end of this week,” the ING analysts added.

Meanwhile, a senior Iranian diplomat told Reuters on Monday that Iran is likely to reject the US proposal to resolve the long-standing nuclear dispute between the two nations, saying the plan does not serve Iran’s interests. If US-Iran talks collapse, sanctions on Iran could remain in place, continuing to limit its oil exports and thereby supporting global oil prices.

“The market is also concerned over renewed pressure on Iranian oil exports,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

Downward pressure:

The Organisation for Economic Cooperation and Development (OECD) has lowered its global economic growth forecast, projecting a slowdown from 3.3% last year to 2.9% in both 2025 and 2026.

"Global economic prospects are weakening, with substantial barriers to trade, tighter financial conditions, diminishing confidence and heightened policy uncertainty projected to have adverse impacts on growth," the OECD said in its latest report.

Concerns over global economic growth has put some downward pressure on oil prices.

By Samantha Shaji and Tuhin Roy

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