Bunker benchmarks in European and African ports have increased with Brent, and adverse weather may disrupt bunkering in Gibraltar tomorrow. 

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($5/mt), Gibraltar and Durban ($3/mt)
• LSMGO prices up in Durban ($16/mt), Rotterdam and Gibraltar ($8/mt)
• HSFO prices up in Gibraltar ($3/mt) and Rotterdam ($2/mt)

Rotterdam’s LSMGO price rise has been steeper than that of its other two grades. The price increase was supported by a 150-500 mt higher-priced LSMGO stem fixed at $779/mt for prompt delivery in the past session.

In Gibraltar, bunkering is proceeding smoothly, with three vessels waiting for bunkers today, down from five yesterday, a source said. Strong wind gusts of up to 25 knots are forecast to hit Gibraltar tomorrow, which could hamper bunkering there. In nearby Ceuta, nine vessels are due to arrive for bunkers today, unchanged from yesterday, according to shipping agent Jose Salama & Co. Two vessels are currently waiting to bunker at the anchorage.

Two lower-priced stems, one each for VLSFO and LSMGO, were fixed in Las Palmas in the past day. As a result, Las Palmas’ LSMGO price fell by $5/mt in the past day and flipped to a slight $1/mt discount to Gibraltar’s LSMGO. Lead times in Las Palmas have eased this week, with 3-5 days recommended now, slightly down from 4-6 days in the previous week, a trader said.

Brent

The front-month ICE Brent contract moved $0.39/bbl higher on the day, to trade at $87.33/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has moved higher as supply disruption concerns continued to influence market sentiments.

An Israeli airstrike in southern Lebanon on Wednesday killed a senior member of the Iran-aligned Hezbollah militia, an official from the group told the Associated Press (AP). This news has once again reiterated that the Middle Eastern conflict continues to escalate and has put upward pressure on oil prices.

Brent futures gained “amid escalating tensions in the Middle East after Israel killed a senior Hezbollah commander, prompting retaliation near the border,” analysts from Saxo Bank said.

Russia’s two biggest oil producers, Rosneft and Lukoil, will cut oil exports from the Black Sea port of Novorossiisk in July, according to a Reuters report. This has also supported Brent’s price gains today.

On the demand side, the US Energy Information Administration (EIA) reported a massive draw of 12.16 million bbls in the US commercial crude oil inventories in the week ending 28 June.

This draw has supported the market’s demand growth expectations and was “far exceeding” the expected 680,000 bbls decline in US crude stocks, Saxo Bank’s analysts said.

Downward pressure:

Brent’s price experienced some downward pressure as the threats of US oil supply disruptions from the approaching Hurricane Beryl faded, according to analysts.

The latest data from the US Bureau of Ocean Energy Management (BOEM) showed that the threats to oil supply disruptions in the Gulf of Mexico are “easing as the storm spares major drilling areas and platforms in US federal waters,” two analysts from ING Bank noted.

Saudi Arabia’s state-owned oil giant Saudi Aramco cut prices for all crude oil grades to Asia for the second consecutive month primarily due to weakness in demand from the Asian markets, Bloomberg reports. This news has capped some of Brent’s price gains today.

“The recent decision of Saudi Aramco to trim oil OSPs has further weighed on the [oil] prices,” ING Bank’s analysts added.

Source: ENGINE by Manjula Nair and Aparupa Mazumder