Fuel prices in European and African ports have mostly gained, and congestion at Gibraltar is mounting.

IMAGE: Bulk carrier docked in Maputo, Mozambique. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($3/mt), unchanged in Gibraltar, and down in Durban ($4/mt)
• LSMGO prices up in Gibraltar ($23/mt) and Rotterdam ($20/mt)
• HSFO prices up in Durban ($4/mt), Rotterdam ($2/mt), and unchanged in Gibraltar
• Rotterdam B30-VLSFO premium over VLSFO down by $11/mt to $260/mt

With Durban’s HSFO price rising while its VLSFO price falling in the past day, the port’s Hi5 spread has narrowed significantly from $45/mt yesterday to $37/mt today.

LSMGO prices in both Gibraltar and Rotterdam have risen the most in the past session, increasing by at least $20/mt. A steeper rise in Gibraltar's benchmark has slightly widened its premium over Rotterdam, to $71/mt.

Four vessels are awaiting bunkers in Gibraltar today, up from two yesterday, according to port agent MH Bland. A lack of space for vessels and limited barge availability are the main reasons for the congestion in the port. Suppliers at the port continue to run 2-6 hours behind schedule, the port agent noted.

In Ceuta, 10 vessels are expected to arrive for bunkers today, according to shipping agent Jose Salama & Co.

Availability of all grades is good in Nacala, while Maputo has good supply of VLSFO and LSMGO, according to a trader.

Brent

The front-month ICE Brent contract has moved $0.66/bbl higher on the day, to trade at $69.27/bbl at 09.00 GMT.

Upward pressure:

A recent Houthi attack on a cargo ship in the Red Sea has added upward pressure on Brent futures.

Yemen-based Houthi militants carried out their first assault on a commercial vessel in nearly six months, according to the United States Naval Institute (USNI). The Magic Seas, a Liberian-flagged, Greek-owned bulk carrier en route from Zhuhai, China, to the Suez Canal, was targeted on 6 July off the coast of Hodeidah, Yemen. 

“Increased attacks on vessels passing through the Red Sea by the Houthis in Yemen provided further support to the market yesterday,” analysts at ING Bank noted.

Oil prices are also being supported by a tightening middle distillates market.

“The [global] middle distillate market continues to show increasing signs of tightness,” ING Bank analysts commented.

“Distillate inventories are critically low, causing a diesel shortage… Globally, distillate supplies remain tight, with Europe and Asia affected by refinery constraints, reduced Russian exports, and rising demand,” Phil Flynn, senior market analyst at Price Futures Group, added.

Downward pressure:

US President Donald Trump informed trade partners on Monday that significantly higher US tariffs would take effect from 1 August, though he later clarified the deadline was “not 100% firm,” according to Reuters.

The announcement has triggered uncertainty across financial markets and raised concerns about potential negative impacts on the global economy and oil demand, putting some downward pressure on Brent futures.

While oil prices have largely shrugged off a larger-than-expected OPEC supply increase scheduled for August, “the spectre of another 548kb/d [548,000 b/d] hike in September would raise the risk of inventories beginning to build as seasonal demand wanes,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Samantha Shaji and Tuhin Roy

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