Bunker benchmark prices have mostly edged up across European and African ports, and prompt supplies are tight in the ARA hub.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($16/mt), Rotterdam ($6/mt) and Gibraltar ($5/mt)
• LSMGO prices up in Gibraltar ($7/mt) and Rotterdam ($4/mt)
• HSFO prices up in Rotterdam and Gibraltar ($3/mt), and unchanged in Durban
• Rotterdam B30-VLSFO premium over VLSFO down by $2/mt to $245/mt
• Gibraltar B30-VLSFO premium over VLSFO up by $12/mt to $303/mt

Durban’s VLSFO price has increased the most among the three ports, jumping $16/mt in the past session. Combined with an unchanged HSFO price, the South African port’s Hi5 spread has widened to $68/mt, from $52/mt yesterday.

Durban’s VLSFO price premium over Rotterdam has widened by $10/mt to $117/mt, and its premium over Gibraltar has increased by $11/mt to $81/mt.

Gibraltar's B30-VLSFO price has risen nearly four times compared to Rotterdam's, widening the latter's price discount to $94/mt, from the previous day's $81/mt.

VLSFO, HSFO and LSMGO supply remains stable in the ARA bunkering hub, but buyers are advised to book 5-7 days ahead, as availability is strained for immediate deliveries with several suppliers, a trader told ENGINE.

Supply is smooth in Germany’s Hamburg, with lead times of 3-5 being sufficient to secure any fuel grade. Meanwhile, 10 days of notice is recommended for delivery of all grades off Skaw in Denmark, and in Sweden’s Gothenburg.  

Western wind gusts of more than 25 knots are forecast off Skaw and in Gothenburg on 15 August, which could complicate deliveries.

Brent:

The front-month ICE Brent contract has lost by $0.12/bbl on the day, to trade at $65.88/bbl at 09.00 GMT.

Upward pressure:

The US inflation rate, based on the Consumer Price Index for all urban consumers (CPI-U), increased by 0.2% in July, after rising by 0.3% in June. On an annual basis, the US CPI advanced 2.7% last month.

This news has provided some support to Brent’s price as it has boosted market expectations of an interest rate cut at the US Federal Reserve’s (Fed) upcoming meeting in September, according to analysts.

The next month is shaping up to be the “long-anticipated” rate cut, remarked SPI Asset Management's managing partner, Stephen Innes.

A rate cut in the US could spur demand growth and make commodities such as oil cheaper for non-dollar holders.

Downward pressure:

Brent crude’s price has declined further after yesterday’s bearish demand forecasts for the global oil market.

Market sentiment has turned negative following releases from the International Energy Agency (IEA) and Energy Information Administration (EIA).

The IEA forecasts that global oil demand will grow by 680,000 b/d this year and 700,000 b/d in 2026, about 200,000 b/d lower than its previous estimate.

Global oil demand growth has been “repeatedly downgraded” since the start of this year, by a combined 350,000 b/d, according to the IEA.

“The IEA monthly oil market report was largely bearish, with the agency expecting large inventory builds towards the end of this year and through 2026,” two analysts from ING Bank said.

By Nachiket Tekawade and Aparupa Mazumder

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