Europe & Africa Market Update 12 Jan

Bunker prices have moved in mixed directions over the weekend, while prompt supplies remain tight in the Gibraltar strait.

IMAGE: View from the Rock of Gibraltar, UK to Algeciras, Spain. Getty Images

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

• VLSFO prices up in Gibraltar ($2/mt), and down in Durban ($4/mt) and Rotterdam ($1/mt)
• LSMGO prices up in Rotterdam ($2/mt), and down in Gibraltar ($1/mt)
• HSFO prices up in Gibraltar ($1/mt), and down in Durban ($6/mt) and Rotterdam ($3/mt)
• B30-VLSFO down in Rotterdam ($67/mt) and Gibraltar ($1/mt)

Algeciras’ LSMGO price has tumbled $28/mt since Friday and is now $1/mt lesser than Gibraltar’s LSMGO price, compared to a $26/mt price premium seen on Friday. A lower-priced 150-500 mt LSMGO stem, fixed at $646/mt, has weighed down on the benchmark.

The VLSFO price in Algeciras has fallen $16/mt over the weekend, weighed down by a lower-priced 150-500 mt stem, fixed at $418/mt. Consequently, VLSFO at the Spanish port is now at a $8/mt discount to Gibraltar, compared to a premium of $10/mt observed on Friday.

Algeciras’ HSFO’s price premium over Gibraltar has fallen $9/mt over the weekend.

The Hi5 spread at Algeciras is around $18/mt thinner than at Gibraltar.

Supplies of all conventional fuel grades in Gibraltar, Algeciras and Ceuta are tight for prompt delivery dates, and buyers are advised to enquire with a lead time of around a week, a trader told ENGINE.

Some suppliers in Gibraltar could be delayed by around a day, while most suppliers in Algeciras are running anywhere between 4-12 hours behind schedule, port agent MH Bland said.

Brent

The front-month ICE Brent contract has gained by $0.72/bbl on the day from Friday, to trade at $63.20/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has rallied due to growing geopolitical unrest in the Middle East.

Oil market analysts are concerned that the ongoing protests in Iran, that began two weeks ago, could threaten oil supply.

“Protests [in Iran] have continued for more than a week amid concerns of a collapse in the local economy,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The OPEC member pumps around 3.2 million b/d of crude oil, making it the fourth-largest producer of the group.

“The situation puts at least 1.9mb/d [1.9 million b/d] of oil exports at risk of disruption,” Hynes added.

Downward pressure:

Venezuela is expected to resume oil exports soon, Reuters reported. This news has put some downward pressure on Brent’s price today.

Last week, US President Donald Trump said Venezuela’s interim administration would be “turning over” between 30 million to 50 million bbls of sanctioned oil to be sold at market price.

The end of Maduro presidency in Venezuela could add fresh barrels to an already oversupplied market, according to analysts.

“US Treasury Secretary Scott Bessent has said that further sanctions against Venezuela may be lifted as early as this week to facilitate oil sales,” two analysts from ING Bank added.

By Nachiket Tekawade and Aparupa Mazumder

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