Europe & Africa Market Update 1 July

Regional bunker benchmarks have mostly moved down, while most bunkering operations have been suspended in Las Palmas due to rough seas.

IMAGE: Ships docked in the Port of Las Palmas, Gran Canaria, Spain. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Rotterdam ($18/mt), Gibraltar ($14/mt) and Durban ($3/mt)
• LSMGO prices up in Durban ($6/mt), and down in Rotterdam ($18/mt) and Gibraltar ($16/mt)
• HSFO prices down in Gibraltar ($17/mt) and Rotterdam ($8/mt)
• B30-VLSFO prices down in Rotterdam ($23/mt) and Gibraltar ($21/mt)

Bunker fuel prices in the three ports have mostly moved lower in the past day, tracking Brent’s fall.

Meanwhile, Las Palmas’ LSMGO price has moved higher. A higher-priced 150-500 mt stem, fixed at $996/mt, has provided support to the benchmark.

Consequently, Las Palmas’ LSMGO has flipped to a $7/mt premium over Gibraltar, compared to a $17/mt discount observed yesterday.

Rough seas, with swells between 1.5-2 metres high, are forecast in the area between 1-3 July.

Bunkering operations have been currently suspended, except for those vessels berthed alongside and those anchored within the breakwaters, port agent MH Bland said.

Fuel availability is reportedly tight for prompt delivery dates in the Canary Islands bunkering hub, a trader told ENGINE. Buyers are usually recommended lead times between 7-10 days for delivery of any fuel grade.

Brent

The front-month ICE Brent contract has declined by $1.07/bbl on the day, to trade at $71.82/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported a sizeable decline in US crude stocks.

US crude oil inventories recorded a decline of 6.1 million bbls in the week ending 26 June, according to estimates from the API.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

“Numbers overnight from the API show that US crude oil inventories continue to fall despite some normalisation in Persian Gulf flows,” two analysts from ING Bank noted.

Downward pressure:

The global oil market has continued to remain optimistic on a supply recovery from the Persian Gulf, despite recent fire exchanges between the US and Iran, market analysts said.

Indirect talks between Washington and Tehran are expected to continue in Doha, Qatar, this week, adding some positive outlook to the ceasefire negotiations.

“Oil prices came under further pressure… dragged down by growing confidence that Persian Gulf crude flows are on the mend,” ING Bank’s analysts said.

There has been a small uptick in inbound vessel traffic in the Strait of Hormuz, suggesting that vessel owners are becoming increasingly confident about moving into the Persian Gulf.

The market has “seen a tentative pick-up of vessels transiting the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said, adding about 24 ships, including oil and LNG tankers, travelled through the key waterway on Monday.

By Nachiket Tekawade and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online