A Gibraltar supplier is expected to have limited volumes to supply until the end of the month, and pre-winter heating oil demand continues to support bunker prices.
All fuel grades remain tight for prompt dates in Gibraltar. A supplier is unable to commit to deliveries until the end of the October after running out earlier this month. Other suppliers have no issues and can supply across Gibraltar Strait ports on short notice.
Rotterdam’s VLSFO price reached all-time highs this week. The price rose with help from Brent, and received extra support from robust bunker demand and below-average stocks. Steepening backwardation in its forward curve has contributed to make it less lucrative to store the fuel grade.
An outage at an atmospheric distillation unit at the VLSFO-producing Sines refinery in Portugal may curb some output to the European market, as the unit is expected to operate at reduced capacity for weeks.
Independently stored fuel oil in the Amsterdam-Rotterdam-Antwerp (ARA) hub recovered some of the lost weight last week, after a big draw in the preceding week, according to Dutch consultancy Insights Global. The stocks remain below their five-year average position, but were helped this week by cargo inflows, mainly from Russia.
ARA’s gasoil stocks fell below 15 million bbls again and remain far below their five-year average. Seasonal winter demand for heating oil and rocketing natural gas prices have spurred gasoil demand and supported prices.
Strong heating oil demand has supported ICE low sulphur gasoil futures, and brought Rotterdam’s LSMGO-VLSFO spread to its widest point since August 2019 – before demand for VLSFO started to pick up in the lead-up to the IMO 2020 transition.
Swells are forecast to pick up in Las Palmas from Thursday and well into next week. Disruptions and delays to outer anchorage bunkering are likely if weather conditions match the forecast. The port’s supply capacity at inner anchorage and at berth is much more limited and can easily get congested when outer anchorage bunkering is suspended.
Weather conditions are expected to deteriorate in Algoa Bay with wind gusts of more than 30 knots forecast on Wednesday evening. Bunkering is likely to be disrupted, shipping agent Sturrock Grindrod says. 14 vessels are due to arrive at the anchorage over the next four days. Disruptions could create a backlog. More bouts of high winds are forecast in Algoa Bay on Friday, Saturday and next Wednesday.
Source: ENGINE
