Fuel prices have remained rangebound in European and African ports, while prompt supplies are tight in the Gibraltar strait.

IMAGE: Oil products tanker moored at the Port of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($6/mt), and down in Rotterdam and Gibraltar ($4/mt)
• LSMGO prices down in Rotterdam ($13/mt) and Gibraltar ($7/mt)
• HSFO prices up in Durban ($6/mt) and Gibraltar ($1/mt), and unchanged in Rotterdam
• Rotterdam B30-VLSFO premium over VLSFO up by $19/mt to $253/mt

LSMGO prices at Rotterdam and Gibraltar have seen considerable declines. A lower-priced 500-1500 mt stem fixed at $671/mt at Rotterdam, and a lower-priced 150-500 mt stem fixed at $722/mt at Gibraltar, have put downward pressure on the prices at both ports.

Prompt supplies are tight at the Gibraltar strait ports, with LSMGO and VLSFO requiring notice of 5-7 days, while HSFO deliveries may take more than 10 days, a trader told ENGINE.

In Gibraltar, demand remains strong with around 55 vessels expected to call for bunkers between 2-9 October, and with 22 vessels expected to arrive on 2 October alone, according to shipping agent A. Mateos & Sons.

In neighboring Algeciras, some suppliers were delayed by anywhere between 2-12 hours, MH Bland added.

Wind gusts of around 25 knots and waves over 1.5 meters are forecast between 6-7 October in all the three ports in the strait, which may suspend bunkering operations and further cause delays.

Brent

The front-month ICE Brent contract has extended its losing streak and inched lower by $0.36/bbl on the day, to trade at $65.44/bbl at 09.00 GMT.

Upward pressure:

The US dollar has come under pressure after the US government shutdown, sliding to a two-week low in trade yesterday.

When the US dollar weakens against other currencies, it becomes cheaper for foreign buyers to purchase oil. This can encourage more purchases and put upward pressure on Brent.

“…because oil is a global market and we’re seeing better-than-expected demand in China, global inventories that are tight, and continuing geopolitical risks, the supply side is not headed towards a glut, and we have a market that at the very best is in balance or is headed to a supply deficit in the coming months,” Phil Flynn, a senior analyst at Price Futures Group said, suggesting possible tailwinds for Brent in the near-term.

Downward pressure:

An unexpected build in US commercial crude inventories has added further downward pressure on Brent.

Official data from the US Energy Information Administration (EIA) showed stocks rising by 1.8 million bbls to around 417 million bbls, compared with industry body American Petroleum Institute’s forecast of a 3.7-million-bbl draw.

Concerns over a looming oversupply continue to dampen market sentiment.

Multiple media reports cited sources that OPEC+ could lift production by 500,000 b/d – either in November or spread over the next three months.

The OPEC Secretariat has refuted those specific reports, but Iraq has now confirmed its own plans to increase output.

Iraq plans to raise domestic oil production from 4.4 million b/d to 5.5 million b/d by the end of 2025, Iraq’s oil minister, Hayyan Abdul Ghani, told Kurdish broadcaster Rudaw. The announcement follows the resumption of crude flows from Kurdistan oil fields to Turkey, which at full capacity could add around 400,000 b/d back to the market.

By Nachiket Tekawade and Konica Bhatt

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