Fuel prices in key European and African ports have dropped significantly, and the Gibraltar Strait ports are facing congestion and bad weather.

IMAGE: View from the Rock of Gibraltar, UK to Algeciras, Spain. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Gibraltar ($18/mt), Durban ($11/mt) and Rotterdam ($1/mt)
• LSMGO prices down in Gibraltar ($13/mt) and Rotterdam ($6/mt)
• HSFO prices down in Gibraltar ($25/mt), Durban ($7/mt) and Rotterdam ($3/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $14/mt to $238/mt

Conventional fuel prices across the three ports have plummeted in the past session, tracking Brent’s downfall.

In South Africa's Durban port, the VLSFO price has dropped more steeply than its HSFO price, narrowing the port’s Hi5 spread by $4/mt to $86/mt.

Gibraltar’s HSFO price has seen the steepest decline among all fuel grades across the three ports, narrowing its premium over Rotterdam by $22/mt to $25/mt. The drop has also widened Gibraltar’s Hi5 spread to $72/mt from $65/mt yesterday.

Prompt bunker supply remains tight across all ports in the Gibraltar Strait, according to a trader. Lead times stretch to 8-10 days for HSFO and are at around 5-7 days each for VLSFO and LSMGO.

There are five vessels awaiting bunkers at Gibraltar today, according to port agent MH Bland. The congestion is mainly because of limited barge availability to deliver bunkers.

Algeciras is forecast to face wind gusts of up to 23 knots, which could affect bunkering operations there, according to MH Bland.

At Ceuta, one vessel is currently awaiting bunkers, and a supplier is delayed by about 5-6 hours, according to shipping agent Jose Salama & Co. Eleven vessels are expected to arrive for bunkers today, the shipping agent added.

Brent

The front-month ICE Brent contract has declined by $1.10/bbl on the day, to trade at $66.95/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has found marginal support from the latest US crude oil stocks data.

US crude oil inventories fell by 974,000 bbls in the week ending 22 August, according to data from the American Petroleum Institute (API).

“Numbers from the American Petroleum Institute overnight were fairly neutral,” remarked two analysts from ING Bank.

A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.

Downward pressure:

Brent crude’s price has come under pressure amid building economic tensions between the US and its key trade partner – India.

US President Donald Trump’s 25% secondary tariffs against India came into effect earlier today, taking the total levy on US imports from India to 50%.

India currently faces tariffs on all exports to the US because of its continued purchases of Russian crude oil, according to the White House.

“The market will be watching Russian oil flows to India closely going forward to gauge the impact,” the two analysts from ING Bank added.

By Samantha Shaji and Aparupa Mazumder

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