Fuel prices in European and African ports have moved upwards, and HSFO availability is strained in Lome.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($14/mt), Gibraltar ($9/mt) and Rotterdam ($6/mt)
• LSMGO prices up in Gibraltar ($13/mt) and Rotterdam ($12/mt)
• HSFO prices up in Gibraltar ($12/mt), Rotterdam ($10/mt) and Durban ($7/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $1/mt to $259/m

Prices in Rotterdam, Durban and Gibraltar have significantly gained in the past session, tracking Brent’s upward movement.

Recommended lead times for HSFO and LSMGO in the ARA hub have widened to 9-10 days, up from last week’s 6-8 days and 5-6 days, respectively. On the other hand, VLSFO lead times have reduced from 6-8 days last week, to 5-6 days now. Prompt supply is tight for all fuel grades, a trader told ENGINE.

Durban’s VLSFO price has increased twice as much its HSFO price in the past day, thus widening its Hi5 spread from $37/mt yesterday, to $44/mt now.

There are two vessels awaiting bunkers today at Gibraltar due to limited barge availability, according to port agent MH Bland. The port has been facing varying degrees of congestion since last week. Suppliers at the port are running 2-12 hours behind schedule today.

Ceuta expects seven vessels to arrive for bunkers today, according to shipping agent Jose Salama & Co.

HSFO availability has tightened further off Walvis Bay, while VLSFO and LSMGO remain readily available, according to a trader.

HSFO availability is strained in Togo’s Lome, a trader said.

Brent

The front-month ICE Brent contract has moved $1.38/bbl higher on the day, to trade at $70.65/bbl at 09.00 GMT.

Upward pressure:

Renewed Houthi attacks on commercial ships in the Red Sea have contributed to a rise in Brent crude futures.

Yemen-based Houthi militants launched a drone and speedboat assault on the Liberian-flagged bulk carrier Eternity C off the coast of Yemen—the second such incident in a single day, ending a period of relative calm. The attack resulted in the deaths of three crew members and injuries to two others. Just a day earlier, the Houthis attacked the Greek-operated vessel Magic Seas.

These incidents have revived concerns over the safety of shipping through the Red Sea, a key route for global trade, thereby pushing up oil prices. Last year, similar attacks forced oil, LNG and other energy carriers to reroute around the region, increasing transportation distances and driving up energy costs.

“Crude oil prices gained amid renewed tensions in the Middle East,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“Increased tensions in the Middle East, in the form of Houthi attacks on vessels in the Red Sea, will provide some support [to oil prices],” two analysts from ING Bank shared this view. 

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

“Distillate inventories are currently at their lowest point since 1996,” noted Phil Flynn, senior market analyst at Price Futures Group.

Downward pressure:

US President Donald Trump has extended the deadline to impose higher tariffs on multiple countries to 1 August—a date he called final—stating, “No extensions will be granted.” He also announced plans to impose a 50% tariff on imported copper and to soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening a trade war that has unsettled global markets, according to Reuters.

Market watchers are increasingly concerned that these tariffs could dampen sentiment across sectors and put downward pressure on oil prices.

Adding to the bearish sentiment, US crude oil inventories rose by 7.1 million bbls in the week ending 4 July, according to estimates from the American Petroleum Institute (API) cited by Trading Economics. A rise in US crude stockpiles typically signals weaker demand and can weigh on Brent futures.

“Numbers from the API overnight were bearish for oil,” commented analysts from ING Bank.

By Samantha Shaji and Tuhin Roy

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