Global Market Update 26 Dec

Global bunker benchmark prices have remained rangebound over the past day, while vessels are facing long queues in Gibraltar.

IMAGE: Oil products tanker moored at the Port of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Singapore, Gibraltar and Houston ($2/mt), and unchanged in Rotterdam and Fujairah
• LSMGO prices up in Gibraltar ($3/mt), Singapore ($2/mt), unchanged in Fujairah, and down in Houston ($3/mt) and Rotterdam ($2/mt)
• HSFO prices up in Gibraltar ($4/mt), Singapore, Fujairah and Houston ($2/mt), and down in Rotterdam ($3/mt)
• B30-VLSFO at a $268/mt premium over VLSFO in Singapore
• B30-VLSFO at a $286/mt premium over VLSFO in Fujairah
• B30-VLSFO at a $380/mt premium over VLSFO in Gibraltar

Fuel availability in Gibraltar is tight for prompt deliveries, with recommended lead times of at least seven days for all grades, a trader told ENGINE.

Gibraltar’s VLSFO price is at a $35/mt premium over Rotterdam, while its HSFO price is just $16/mt higher. Gibraltar's HSFO price has risen more than its VLSFO price in the past day, slightly narrowing the port's Hi5 spread to $55/mt. The Hi5 spread at Gibraltar is now $19/mt wider than at Rotterdam.

LSMGO bunkers at Gibraltar can cost around $44/mt more than in Rotterdam.

Ships calling at Gibraltar for bunkers are facing strong congestion, with around 12 vessels queued for deliveries and suppliers running around 10-24 hours behind schedule, port agent MH Bland said.

Fujairah’s LSMGO price is at significant premiums of $107/mt over Singapore and $64/mt over Zhoushan. In Fujairah, most suppliers are still recommending lead times of 5–7 days for all grades, broadly unchanged from the previous week.

In Taiwan, Keelung and Hualien, suppliers can typically deliver both VLSFO and LSMGO within two days, consistent with last week, while deliveries in Taichung and Kaohsiung require slightly longer lead times of around three days.

Prompt bunker supply is tight in Houston. HSFO and VLSFO deliveries require lead times of at least 7 days. LSMGO can be delivered within 5–7 days, a source said.

The Houston Pilots Association have resumed boardings for outbound vessel transits this morning, while inbound transits remain suspended.

The port, along with the nearby bunkering spot at the Galveston Offshore Lightering Area (GOLA), is currently facing delays in bunker deliveries due to poor visibility caused by dense fog. 

Brent

The front-month ICE Brent contract has lost $0.12/bbl on the day from Wednesday, to trade at $62.44/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has drawn some support from heightened risks to global supply stemming from developments in Venezuela and Russia.

Ongoing attacks by Russia and Ukraine targeting each other’s energy assets have increased fears of supply disruptions.

Meanwhile in Venezuela, oil exports face fresh uncertainty after the US intercepted an oil tanker last week.

Washington has increased economic pressure on Venezuelan oil shipments and carried out airstrikes against Islamic State militants in Nigeria’s Sokoto state, Reuters reported.

Venezuela and Nigeria are both major producers in the global oil market.

Downward pressure:

This week’s oil inventory data from the American Petroleum Institute (API) has put downward pressure on Brent crude’s price.

API data showed that stockpiles rose by 2.4 million bbls in the week ending 19 December.

Crude stock builds are typically seen as a signal of weaker demand and often put downward pressure on oil prices, according to market analysts.

“The market will have to wait till Monday for corresponding data from the Energy Information Administration [EIA],” VANDA Insights’ founder Vandana Hari remarked.

The EIA report has been delayed this week due to the Christmas holiday.

By Nachiket Tekawade, Gautamee Hazarika and Aparupa Mazumder

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