Europe & Africa Market Update 1 June

Bunker prices across European and African ports have climbed up, and prompt deliveries are tight in the ARA.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

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

• VLSFO prices up in Durban ($50/mt), Antwerp ($41/mt) and Gibraltar ($17/mt)
• LSMGO prices up in Antwerp ($31/mt) and Gibraltar ($16/mt), and down in Durban ($105/mt)
• HSFO prices up in Durban ($410/mt) and Gibraltar ($9/mt), and down in Antwerp ($5/mt)
• B30-VLSFO up in Gibraltar ($6/mt)

Bunker benchmarks have mostly gained over the weekend, tracking Brent's rise.

Meanwhile, the price of HSFO in Belgium’s Antwerp has dipped slightly since Friday, even as the port’s VSLFO price registered a strong increase.

This has widened the port’s Hi5 spread by $46/mt to $105/mt over the weekend, significantly increasing the economic incentive for scrubber-fitted ships to bunker HSFO in Antwerp.

Prompt fuel availability is tight in the ARA region. Buyers are recommended longer lead times of around 10 days for VLSFO and HSFO deliveries, while LSMGO supplies need a notice of around six days, a trader said.

Disruption in the Strait of Hormuz has tightened availability of blending components in the ARA, a supplier said. Loading delays have increased in the area, the supplier added.

The ARA’s independently held fuel oil stocks averaged 17% lower in May than in April to levels not seen in more than a decade, according to Insights Global data.

Brent

The front-month ICE Brent contract has gained by $0.64/bbl on the day from Friday, to trade at $94.15/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has risen at the start of the week following US airstrikes on Iranian sites over the weekend.

The US Central Command (CENTCOM) has once again targeted radar and command sites for drones in Iran – raising concerns of the fragile ceasefire to collapse.

Meanwhile, the Strait of Hormuz continues to remain closed, “disrupting more than 15mb/d [15 million b/d] of world oil supply,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

The US military called the action as “self-defense” strikes, after Iran shot down a US MQ-1 drone that was operating in the Persian Gulf.

Several vessels trying to transit the Strait have “come under attack in recent days, underscoring the risks that remain for shipowners and crew,” Hynes added.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by four to 429 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Nachiket Tekawade and Aparupa Mazumder

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