Bunker benchmarks have moved in mixed directions across European and African ports, and prompt supply is challenging in Gibraltar strait.

IMAGE: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($6/mt) and Gibraltar ($5/mt), and down in Rotterdam ($5/mt)
• LSMGO prices up in Rotterdam ($10/mt) and Gibraltar ($1/mt)
• HSFO prices up in Gibraltar ($4/mt) and Durban ($3/mt), and down in Rotterdam ($14/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $19/mt to $240/mt
• Gibraltar B30-VLSFO premium over VLSFO down by $6/mt to $306/mt

Rotterdam’s HSFO price has recorded the largest decline among the conventional fuels in the past session, thus widening its discount to Gibraltar by $18/mt to $52/mt. However, the port's VLSFO price recording a smaller decline has widened its Hi5 spread by $9/mt to $102/mt.

Increase in Gibraltar's fuel prices have been rangebound.

Fuel availability for immediate supplies remains tight at the Gibraltar Strait ports, with 5-7 days of lead time required for HSFO, VLSFO and LSMGO deliveries, a trader said.

Some suppliers are running up to 18 hours behind schedule in Gibraltar, compared to yesterday when some suppliers were running 2-6 hours behind, according to port agent MH Bland.

In neighbouring Algeciras, supplier delays are much longer with some delayed by around one day, compared to up to 18-hour delays earlier, port agent MH Bland said.

Around 11 vessels are expected to call at Gibraltar today for bunkering, shipping agent A. Mateos & Sons said.

Algeciras, Gibraltar and Ceuta are all expected to experience strong wind gusts of more than 25 knots and waves above 1.5 meters between 5-6 September, which may disrupt bunkering operations.

Brent

The front-month ICE Brent contract has lost by $0.10/bbl lower on the day, to trade at $66.92/bbl at 09.00 GMT.

Upward pressure:

Growing aggression between Russia and Ukraine has continued to lend some support to Brent crude’s price this week.

The Ukrainian military has targeted major Russian oil facilities in recent weeks, including oil refineries in Krasnodar and Syzran, according to a Reuters report.

“Escalating tensions persist as Ukraine continues to target Russian oil refineries, disrupting Russia’s oil product flows,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

The Krasnodar oil refinery produces about 3 million mt/year of light petroleum products, the Reuters report adds.

Downward pressure:

Brent crude has remained under pressure amid concerns of increasing OPEC+ supply.

The group is scheduled to meet on Sunday to discuss production levels, after eight members of the group unwound voluntary cuts of 2.2 million b/d over the past six months. The voluntary production cuts were announced in 2024.

“Market expectations are growing that the [OPEC+] group will continue to push more barrels into the market, in an effort to gain market share lost to US shale producers in recent years,” Hynes said.

The latest US crude inventory report has put further downward pressure on Brent. Commercial US crude oil inventories have gained by 2.4 million bbls to touch 421 million bbls for the week ending 29 August, according to data from the US Energy Information Administration (EIA).

“Sentiment wasn’t helped by a bearish US inventory report,” Hynes said. US crude oil stockpiles are “now at their highest level since early August,” he added.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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