Conventional fuel prices have mostly gained in European and African ports, and prompt HSFO supplies are tight in Durban.

IMAGE: Aerial view of Durban port landscape. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($9/mt) and Gibraltar ($4/mt), and down in Rotterdam ($6/mt)
• LSMGO prices up in Gibraltar ($14/mt) and Rotterdam ($8/mt)
• HSFO prices up in Rotterdam and Gibraltar ($9/mt), and down in Durban ($4/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $28/mt to $247/mt

Increase in fuel prices at the three major ports have tracked Brent's rise.

The price of VLSFO at Rotterdam is an exception, having moved downwards, while HSFO gained significantly, narrowing the Dutch port’s Hi5 spread by $15/mt in a single day.

Durban’s HSFO price has edged lower, while its VLSFO price has gained, thus widening the port’s Hi5 spread by $13/mt.

HSFO availability is a bit tight in the South African port, with buyers requested to give around one week of notice for deliveries, while VLSFO can be supplied with shorter lead times of 2-3 days, a trader told ENGINE.

Waves of more than 2.5 meters accompanies by wind gusts of around 25 knots are forecast between 24-25 October and on 31 October at the South African port, which may suspend bunkering operations and cause further delays.

Brent

The front-month ICE Brent contract has gained by $1.26/ bbl on the day, to trade at $62.39/bbl at 09.00 GMT.

Upward pressure:

The American Petroleum Institute (API) has estimated a 2.98 million-bbl draw in US crude stocks over the past week, which could mark the first decline, after two consecutive weeks of builds. The official US Energy Information Administration (EIA) data is expected later today.

Trump has said he expects to reach a “great deal” with China when he meets President Xi Jinping later this month, according to CNBC. “It’s going to be a great trade deal. It’s going to be fantastic for both countries, and it’s going to be fantastic for the entire world,” CNBC quoted him as saying.

“Trump’s trade negotiation comments are likely providing some support to the market,” ING’s head of commodity strategy, Warren Patterson said.

“Further support is likely coming from the cancellation of the Trump-Putin summit, which erodes hopes for a Russia-Ukraine peace deal,” Patterson added.

Downward pressure:

On the flip side, lingering concerns of an oversupplied market could temper optimism.

A US licensing update has allowed Venezuela to resume crude exports to the US “following a five-month pause,” commodities research firm Energy Aspects said. Reuters reported in August that Chevron had been granted a “restricted license” by the US Treasury Department to operate in Venezuela.

“The prompt Brent discount to the six-month contract has widened sharply, reflecting a growing belief that OPEC+ output increases and rising non-OPEC supply will keep the market well stocked through the winter,” Ole Hanson, head of commodity strategy at Saxo Bank said.

“With Brent stuck below USD 65, speculative sentiment remains fragile. Managed money accounts have been reducing long exposure in recent weeks while adding to gross shorts, betting on further downside as inventories build and the curve softens,” Hanson added.

By Nachiket Tekawade and Konica Bhatt

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