Most fuel prices have decreased in European and African ports, and prompt supply is tight at the Gibraltar Strait ports.

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

Changes on the day, from Friday, to 09.00 GMT today:

• VLSFO prices down in Durban ($16/mt), Rotterdam ($9/mt) and Gibraltar ($2/mt)
• LSMGO prices up in Gibraltar ($19/mt) and down in Rotterdam ($9/mt)
• HSFO prices up in Rotterdam ($4/mt), and down in Durban ($12/mt) and Gibraltar ($1/mt)
• Rotterdam B30-VLSFO premium over VLSFO down by $22/mt to $230/mt

Prices of most conventional fuels at the three major ports have recorded losses over the weekend, tracking Brent's decline.

The surge in Gibraltar’s LMSGO price has been an exception, while Rotterdam’s LSMGO price has simultaneously slipped, thus widening Gibraltar’s price premium by over $28/mt. A higher-priced 500-1500 mt stem, fixed at $734/mt, may have provided support to the price increase at the Mediterranean port.

The price of HSFO at Rotterdam has also inched up, while the port's VLSFO price fell with the broader trend. This has narrowed the Dutch port's Hi5 spread by around $13/mt to just $15/mt.

Meanwhile, Gibraltar’s Hi5 spread has further narrowed to $7/mt.

Availability at the Gibraltar Strait ports remains tight for immediate supplies, with lead times of more than 10 days recommended for HSFO supplies, while VLSFO and LSMGO supplies need a 5-7-day notice, a trader said.

At the port of Gibraltar, congestion mounts with around nine vessels currently waiting for supplies, the main cause being the unavailability of bunker barges, port agent MH Bland said. Some suppliers can be delayed by almost a day, the port agent added. Delays of more than a day are also expected from some suppliers in neighboring Algeciras, according to the port agent.

Brent

The front-month ICE Brent contract has declined by $0.98/bbl on the day from Friday, to trade at $63.84/bbl at 09.00 GMT.

Upward pressure:

Oil has retained some ground after official drilling figures showed a decline in US oil rigs. The total number of oil rigs fell by four over the week to 418, according to Baker Hughes.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

Downward pressure:

Brent crude has lost momentum amid easing tensions in the Middle East.

The Israeli government and Hamas leaders have reached a deal for a ceasefire in the Gaza enclave in return for the release of all Israeli hostages held by the Iran-aligned militant group, according to media reports.

“This development [ceasefire announcement] has significantly cut the risk premium associated with the conflict,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

The conflict, in its second year now, has destabilised the region, which is one of the biggest sources of the world’s crude oil.

“President Trump’s ceasefire announcement immediately took the premium out of the price of oil,” said Price Futures Group’s senior market analyst Phil Flynn.

The deal has also reduced the risk that Iranian proxies like the Yemen-based Houthis would continue to attack oil vessels transiting the Red Sea region, Flynn added.

By Nachiket Tekawade & Aparupa Mazumder

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