Global Market Update 3 April

Bunker prices across major global ports have moved in mixed directions, and bunker demand is strong in Houston. IMAGE: Aerial view of the Port of Houston, Texas. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Fujairah ($13/mt), Gibraltar ($5/mt), Houston ($4/mt), Antwerp ($3/mt), Singapore ($1/mt), and down in Durban ($22/mt) and Los Angeles ($5/mt)
• LSMGO prices up in Gibraltar ($47/mt), Fujairah ($45/mt), Antwerp ($18/mt), Singapore ($14/mt), Los Angeles ($5/mt), and down in Durban ($1123/mt) and Houston ($1/mt)
• HSFO prices up in Los Angeles ($22/mt), Singapore ($11/mt), Gibraltar, Houston ($6/mt), Fujairah ($2/mt), and down in Durban ($20/mt) and Antwerp ($2/mt)
• B30-VLSFO prices up in Antwerp, Singapore and Gibraltar ($5/mt)

Bunker fuel demand is good in Houston, with tight availability across all grades. Suppliers recommend lead times of around 8-12 days for all three grades.

Buyers are advised to secure stems well in advance across the US West Coast, according to a trader.

In the ports of Los Angeles and Long Beach, lead times have increased across all grades. HSFO and LSMGO now require around 7-9 days, while VLSFO requires around 9-11 days. The earliest delivery dates for VLSFO in Los Angeles are indicated from around 12 April onwards.

In Taiwan, fuel supply has remained largely unaffected by tensions in the Middle East. However, market discussions suggest that state-owned CPC Corporation may implement fuel rationing in April to mitigate potential impacts from the crisis, according to a Taiwan-based trader. Meanwhile, prices have shown a stronger response. Volatility in Brent crude, driven by Middle East tensions, has had a significant influence on bunker markets, the trader noted.

Recommended lead times for VLSFO and MGO are around two days in Keelung and Hualien, while slightly longer lead times of about three days are advised in Taichung and Kaohsiung.

The LSMGO price in Durban has declined by more than $1,100/mt over the past day, and is now trading around $2,060/mt.

The South African port’s VLSFO price has slipped by $22/mt over the past day, while the grade’s price has edged higher off Port Elizabeth in Algoa Bay.

Fuel availability is tight in Durban for both HSFO and VLSFO and buyers are advised to enquire much in advance, a trader said. VLSFO deliveries are more readily available in Algoa Bay, the trader added.

Rough winds of more than 25 knots and waves over 2.5 metres are forecast in Durban today, prompting South Africa’s Transnet Port Authority to issue a weather warning. Bunker deliveries could be impacted by the rough weather.  

 Brent

The ICE Brent Futures market is closed for trading today on account of Good Friday holiday. Front-month ICE Brent closed at $109.03/bbl on Thursday, which was $0.18/bbl higher than the price at 09.00 GMT on the day.

Upward pressure:

Brent futures traded firm this week, drawing support from recent geopolitical events that have rattled global markets.

Yemen‑based Houthi militant group joined the Middle East war last week by launching ballistic missiles towards Israel, raising concerns of a broader regional escalation.

The US Central Command (CENTCOM) said about 3,500 additional soldiers arrived in the Middle East earlier this week, while US President Donald Trump threatened to "blow up" Iran’s oil wells and power plants, as well as target Kharg Island and its desalination plants, if ongoing negotiations to reopen the Strait of Hormuz yield no outcome.

Meanwhile, Iran’s parliament approved a plan to levy tolls on vessels transiting the Strait of Hormuz, Iranian state media reported, without disclosing the toll fees.

“If Iran maintains effective control [of the Strait of Hormuz], the disruptions in the oil market will only persist,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

While there were no significant downward pressures on Brent’s price this week, market participants had an eye on emergency stock releases over the upcoming weeks, as a part of the International Energy Agency’s (IEA) commitment to ease some pressure on oil prices.

France released about 580,000 bbls of oil products under the IEA’s coordinated emergency stock release effort earlier this week.

Commercial US crude oil inventories also increased by 5.5 million bbls in the week ending 27 March, according to data from the US Energy Information Administration’s (EIA).

The EIA report comes a day after the American Petroleum Institute (API) reported a 10.3 million bbl increase in crude stocks over the same period.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Nachiket Tekawade, Aparupa Mazumder and Tuhin Roy

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