Europe & Africa Market Update 12 Oct

Bunker prices in major European and African ports have mostly gained since Friday, and fuel availability is tight for prompt supplies 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 ($27/mt) and Rotterdam ($24/mt), and down in Gibraltar ($4/mt)
• LSMGO prices up in Rotterdam ($67/mt), Gibraltar ($49/mt) and Durban ($41/mt)
• HSFO prices up in Durban ($31/mt), Rotterdam ($25/mt) and Gibraltar ($16/mt)
• B30-VLSFO price up in Rotterdam ($13/mt)

Rotterdam’s LSMGO price gain has outpaced Gibraltar’s significantly. Two higher-priced offers in Rotterdam, between $1,453-1,458/mt for 500-1,500 mt stems, have provided additional support to the Dutch port’s benchmark.

Consequently, Rotterdam’s price discount to Gibraltar’s LSMGO has narrowed by $18/mt since Friday, to $81/mt.

At $81/mt, Rotterdam’s LSMGO price discount to Gibraltar has more than halved in the last one week, from $170/mt observed last Monday. This is mostly due to a $113/mt surge in Rotterdam’s LSMGO price in that period.

ICE Low Sulphur Gasoil front-month settlement price increased around $100/mt from $1,383/mt on 5 October, to $1,483/mt on 9 October.

Comparatively, Rotterdam’s B100 offers a significant discount to LSMGO, which has led to increased demand for B100 at the Dutch port, a trader said.

Fuel availability is tight for prompt supplies in the ARA ports, with buyers recommended lead times of around 5-7 days to get good coverage from suppliers, the trader said.

Brent

The front-month ICE Brent contract has gained by $2.58/bbl on the day from Friday, to trade at $105.64/bbl at 09.00 GMT.

Upward pressure:

Middle East tensions continue to support Brent crude futures, with escalating security risks threatening oil supplies and shipping routes.

The Iran-aligned Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport, which killed 13 people and injured more than 300. Meanwhile, further attacks on tankers transiting the Strait of Hormuz have been reported this month, threatening to undermine the recovery in Middle East crude exports seen in September, Reuters reported.

“Crude oil prices pushed higher… amid mounting risks to supply. Attacks on tankers transiting the Strait of Hormuz continue to rise, with at least 17 attacks since 28 September,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

“This threatens supply flows in the Red Sea, where the Houthis have tried to block Saudi tankers from operating. The attacks are applying upward pressure on freight costs,” Hynes added.

Downward pressure:

On Friday, Trump said Russia would immediately supply more than 2.25 million bbls of diesel to US and global markets, with additional volumes to follow later, Reuters reported.

“It would appear that the move in oil today is probably less to do with developments in the Middle East and more to do with Russia,” two analysts from ING Bank noted.

Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire. However, Ukrainian President Volodymyr Zelenskiy said he was still awaiting details of the agreement, while Russia made no comment, Reuters added.

“Trump announces Ukraine energy ceasefire with Russia, surprising Zelensky,” commented Vanda Insights founder Vandana Hari.

By Nachiket Tekawade and Tuhin Roy

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