Bunker benchmarks in European and African ports have moved in mixed directions, and prompt supply of VLSFO and LSMGO is tight in Port Louis. 

IMAGE: Aerial view of Port of Gothenburg. Gothenburg Port Authority

Changes on the day from Friday, to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($9/mt), Rotterdam ($2/mt), and down in Durban ($1/mt)
• LSMGO prices up in Gibraltar ($7/mt) and down in Rotterdam ($4/mt)
• HSFO prices up in Gibraltar ($4/mt), Durban ($3/mt) and Rotterdam ($2/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $2/mt to $264/mt
• Gibraltar B30-VLSFO premium over VLSFO down by $3/mt to $301/mt

LSMGO price in Sweden’s Gothenburg has dropped by $14/mt over the weekend, to $689/mt now. A lower-priced 150-500 mt LSMGO stem fixed at $690/mt has weighed on the port's benchmark. Gothenburg's LSMGO price has flipped to a $14/mt discount to Gibraltar, compared to Friday, when it held a $7/mt premium. Against Rotterdam, its LSMGO price premium has narrowed to $27/mt from $37/mt.

Gothenburg’s VLSFO price has also come down over the weekend, weighed down by a lower-priced 150-500 mt stem fixed at $489/mt. The port's benchmark is now at a $26/mt discount to Gibraltar, compared to Friday, when the prices were at parity. Its premium over Rotterdam has narrowed to $20/mt, from $39/mt on Friday.

Meanwhile, LSMGO price has risen in Gibraltar, while the grade's price has declined in Rotterdam. The diverging price moves have widened Gibraltar’s LSMGO premium over Rotterdam by $11/mt, to $41/mt now.

Bunkering is progressing smoothly in Gibraltar, with all suppliers operating on schedule now, compared to last week when one supplier was 4-6 hours behind, according to port agent MH Bland.

In Mauritius' Port Louis, securing prompt supplies of VLSFO and LSMGO can be difficult. Lead times of 7-10 days are advised for both grades, according to a trader. Wind gusts of over 25 knots and waves of up to 1.5 meters are forecast at the port today, which could disrupt bunkering operations. 

Brent

The front-month ICE Brent contract has declined by $0.37/bbl on the day from Friday, to trade at $66.28/bbl at 09.00 GMT.

Upward pressure:

Brent futures have gained support from rising demand growth expectations.

Last week, the US Energy Information Administration (EIA) reported a 3 million-bbl draw in crude oil inventories. A decline in US crude stocks often signals stronger demand and can lend support to Brent, according to analysts.

Expectations of demand growth from China have provided additional support to oil prices. The country’s daily crude oil imports averaged 11.12 million b/d in July, up 11.5% year-on-year.

Downward pressure:

Brent crude’s price has come down, as the market shifted its focus to the highly anticipated meeting between US President Donald Trump and Russian President Vladmir Putin.

“If we do see some level of de-escalation, it would remove sanction risk from the oil market. This would likely drive prices lower, given the bearish fundamentals,” said two analysts from ING Bank.

The two leaders are set to meet in Alaska on 15 August to discuss a Russia-Ukraine peace deal, though Ukrainian President Volodymyr Zelenskyy has yet to receive an official invitation to the summit.

“News of a Ukraine summit between US President Donald Trump and Russian President Vladimir Putin on August 15 in Alaska prompted growing relief over oil supply stability,” remarked VANDA Insights’ founder Vandana Hari.

By Nachiket Tekawade and Aparupa Mazumder

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