Fuel prices at European and African ports have moved slightly in varied directions, and bad weather conditions are forecast at the Gibraltar Strait ports.

IMAGE: Aerial view of Durban Harbour, South Africa. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($4/mt) and Durban ($3/mt), and unchanged in Gibraltar
• LSMGO prices up in Gibraltar ($1/mt), and down in Rotterdam ($7/mt) 
• HSFO prices up in Gibraltar ($5/mt), Rotterdam ($2/mt) and Durban ($1/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $14/mt to $269/mt
• Gibraltar B30-VLSFO premium over VLSFO down by $2/mt to $253/mt

Prices of conventional fuels at the three ports have remained relatively stable over the past session, despite brent's gains.

Rotterdam's LSMGO price decline in the past session has widened the port's discount to Gibraltar to $34/mt from $26/mt yesterday. LSMGO supply remains dry at the South African port of Durban.

Congestion at the port of Gibraltar has eased, with only four vessels currently awaiting bunkers, down from 10 yesterday, according to port agent MH Bland.

The ports in the Gibraltar Strait - Gibraltar, Algeciras and Ceuta - are forecast to experience wind gusts above 25 knots causing weather-related disruptions to operations, MH Bland noted.

Bad weather is forecast at Algeciras from 25-27 July, according to MH Bland. Bunker operations at the port have been declared unsuitable due to the same, the port agent added.  

Fuel remains readily available at these ports, according to a trader.

At Las Palmas, bunker supply is tight, with lead times widening to 7-10 days this week, compared to 5-7 days last week, according to a trader.

Brent:

The front-month ICE Brent contract has gained by $0.33/bbl on the day, to trade at $69.40/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has gained amid market optimism over trade talks between the US and the European Union (EU), following closely on the heels of a recent US-Japan deal.

Both trade partners are expected to come to an agreement that could boost trade and support demand growth for commodities like oil, analysts say. “The main upward impetus [to oil] was coming from market optimism that the US and the European Union are closing in on a trade deal,” said VANDA Insights’ founder Vandana Hari.

Earlier this week, the US and Japan reached a deal under which Japan’s auto sector will face a reduced tariff of 15%, down from the previously imposed 27.5%.

“The US says it has managed to conclude several trade-deals this week, including with Japan and the Philippines,” two analysts from ING Bank noted.

Duties on Japanese goods that were scheduled to come into effect from 1 August will also be lowered to 15% from 25%.

“These deals should help reduce uncertainty and also ease some of the demand concerns that have been lingering in the oil market,” ING analysts added.

Downward pressure:

The US administration has reportedly allowed US oil company Chevron to resume operations in Venezuela. This news has put some downward pressure on Brent today.

Washington is preparing to announce new authorisations to Chevron’s key-oil partner - Venezuela’s state-run oil company PDVSA, Reuters reported, citing five sources.

Earlier this year, US President Donald Trump had revoked a license given to Chevron to operate in Venezuela. The new authorisation will allow both companies to resume joint operations and conduct oil-for-debt swaps in the sanctioned OPEC country.

“This reversal coincides with the release of some Americans detained in the South American country,” ING Bank analysts said.

If approved, this move could see Venezuelan oil exports rise by about 200,000 b/d, the analysts remarked. “Welcome news to US refiners that will ease some tightness in the heavier crude market,” they added.

By Samantha Shaji, Nachiket Tekawade and Aparupa Mazumder

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