Most bunker benchmarks at European and African ports have recorded gains, and prompt supplies are tight in the Strait of Gibraltar.
IMAGE: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($7/mt) and Gibraltar ($6/mt) and unchanged in Durban
• LSMGO prices up in Gibraltar ($13/mt) and Rotterdam ($11/mt)
• HSFO prices up in Gibraltar ($10/mt) and Durban ($8/mt), and down in Rotterdam ($2/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $6/mt to $286/mt

Most benchmark fuel prices have increased over the past day, tracking the rise in Brent.

Rotterdam’s HSFO price has been an outlier, having dipped slightly. Conversely, Gibraltar’s HSFO price has climbed sharply, widening the Mediterranean port's price premium over Rotterdam by $12/mt to $46/mt.

Prompt supplies of all fuel types is difficult at the Gibraltar Strait ports, with 8-10 days of lead time required for HSFO deliveries, and a 5-7day notice required for VLSFO and LSMGO, a trader told ENGINE.

Gibraltar’s congestion has eased with only two vessels currently awaiting bunkers at the port, compared to nine yesterday, port agent MH Bland said. Some supplies can still be delayed by anywhere between 2-12 hours, the port agent added. At least 15 vessels are expected to call at the port for bunkers today, according to shipping agent A. Mateos & Sons.

Wait times in nearby Algeciras have reduced to around 2-12 hours, compared to last week when some suppliers were delayed by as much as one day, while all deliveries are now on time in Ceuta, compared to last week, when one supplier was running 4-6 hours behind schedule, MH Bland added.

Brent

The front-month ICE Brent contract has gained by $0.95/bbl on the day, to trade at $68.03/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has moved higher after the American Petroleum Institute (API) reported a drop in US crude stocks.

US crude oil inventories dropped by 3.42 million bbls in the week ending 12 September, according to API estimates cited by Trading Economics.

The API data was “in contrast to the average market expectations of a build of 1.07m barrels [1.07 million bbls],” remarked two analysts from ING Bank.

A drop in US crude stocks typically indicates higher demand in the world’s largest oil-consuming nation and can lend support to oil prices.

Geopolitical flare-ups have also continued to support Brent today. Overnight, Israel launched an attack on Yemen’s port city of Hodeida, the Associated Press (AP) reported.

The strike “threatens to escalate the conflict in the region and endanger crude oil supplies,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

A sharp rise in Brent’s price has been capped as the market shifts its focus to the US Federal Reserve’s (Fed) meeting, which concludes later today.

The meeting is seen as highly pivotal, with the US central bank expected to decide whether to maintain current interest rates or implement a cut, according to market analysts.

Higher interest rates in the US can dampen demand growth and make dollar-denominated commodities like oil more expensive for holders of other currencies.

By Nachiket Tekawade and Aparupa Mazumder

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