Most regional bunker benchmarks have gone up, and prompt bunker availability is normal in Rotterdam.  

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

• VLSFO prices up in Gibraltar ($9/mt) and Rotterdam ($4/mt), and down in Durban ($10/mt)
• LSMGO prices up in Gibraltar ($8/mt) and Durban ($7/mt), and down in Rotterdam ($8/mt)
• HSFO prices up in Gibraltar ($9/mt) and Rotterdam ($8/mt)

Rotterdam’s LSMGO price has declined over the weekend, while Gibraltar’s LSMGO price has increased. These diverging price moves have widened Gibraltar’s LSMGO premium over Rotterdam by $16/mt to $93/mt now.

Bunker availability is good for prompt delivery in Rotterdam and in the wider ARA hub, with recommended lead times of 3–4 days for all grades. In contrast, availability across all grades is running tight for prompt dates in Gibraltar, with lead times of 4–6 days advised, a trader said.

Bunkering is proceeding smoothly in Gibraltar, with just two vessels waiting for bunkers today, up from one on Friday, according to a source. In nearby Ceuta, there are eight vessels due to arrive for bunkers today, up from seven on Saturday, according to shipping agent Jose Salama & Co. One vessel is waiting for bunkers at the anchorage, the shipping agent said.

Meanwhile, the availability of LSMGO is still tight in the South African port of Durban. Lead times of up to two weeks are recommended for the grade. Prompt VLSFO supply is tight in both Durban and Richards Bay, with lead times of 7–10 days advised.

Brent

The front-month ICE Brent contract has lost $0.91/bbl on the day from Friday, to trade at $79.34/bbl at 09.00 GMT.

Upward pressure:

Escalating geopolitical conflicts in the Middle East and eastern Europe have provided risk premiums to commodities in recent weeks and put an upward pressure on Brent’s price.

Debris from a Ukrainian drone sparked a fire at an industrial warehouse in southwest Russia’s Rostov region on Sunday, Reuters reported. The region has been prone to drone attacks in the past that led to fire incidents in oil refineries there.

In the Middle East, Iran-aligned Hezbollah armed group launched multiple missiles on Israel over the weekend, fuelling further conflict in the region.

Iran and its regional proxies “vowed to attack Israel to avenge the killings of Hamas and Hezbollah leaders last month,” VANDA Insights’ founder and analyst Vandana Hari said. Besides, Tehran appears to be holding back from participating in the latest round of ceasefire talks that began in Qatar last week, she further remarked.

Downward pressure:

Renewed talks of a ceasefire agreement in the Gaza Strip have eased some oil supply concerns in the region and put downward pressure on Brent’s price.

Oil market analysts will keep a close eye on the US secretary of state Antony Blinken’s visit to Israel this week, where he is expected to “push for a Gaza ceasefire,” Hari said.

Concerns about weak oil demand growth in China have also built some downward pressure on Brent futures. China’s refinery activity remained sluggish in July due to a slowdown in demand, according to market analysts.

The US Federal Reserve’s (Fed) annual Jackson Hole Economic Symposium this week will gather central bank leaders in Wyoming, US. Oil market investors will closely watch Fed chairman Jerome Powell’s speech on Friday, which is expected to provide insights into the US interest rate policy ahead of the central bank’s monetary policy meeting in September.

Market analysts’ focus remains on “Gaza peace talks, China demand softness and the upcoming Jackson Hole meeting,” analysts from Saxo Bank said in a note.

Source: ENGINE by Manjula Nair and Aparupa Mazumder