Europe & Africa Market Update 13 Oct

Bunker prices in European and African ports have moved in mixed directions, while prompt fuel availability is tight at Gibraltar Strait ports.

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($4/mt) and Gibraltar ($3/mt), and down in Durban ($5/mt)
• LSMGO prices up in Durban ($5/mt) and Gibraltar ($2/mt), and down in Rotterdam ($30/mt)
• HSFO prices down in Gibraltar ($11/mt), Durban ($4/mt) and Rotterdam ($2/mt)

Rotterdam’s LSMGO price has slumped significantly over the past day, while Gibraltar’s LSMGO remains steady. This has widened Gibraltar’s price premium over Rotterdam by $32/mt over the past session, to $113/mt.

The HSFO price in Gibraltar has dropped, while the port's VLSFO price has edged up. This has widened the port's Hi5 spread by $14/mt. However, the spread remains significantly narrow at $20/mt compared to Durban and Rotterdam.

Gibraltar's Hi5 spread has almost diminished over the last two months from $137/mt on 13 August, to current levels.

The HSFO price has surged around $156/mt in that period, while VLSFO has increased by only $38/mt.

Fuel availability is tight for prompt supplies at the Gibraltar strait ports, with buyers recommended lead times of around 7-10 days to get competitive offers from a wide selection of suppliers, a trader told ENGINE.

Gibraltar is seeing slight congestion with around 10 vessels currently awaiting bunkers, with some suppliers delayed by around 24 hours on deliveries, while others delayed by around 6-8 hours, port agent MH Bland said.

Brent

The front-month ICE Brent contract has lost by $0.62/bbl on the day, to trade at $105.02/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has remained well supported amid ongoing risks to oil supplies from the Persian Gulf.

“Tensions in the Middle East have been rising in recent weeks as Iran intensifies attacks on tankers in the Persian Gulf,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Repeated attacks by Yemen-based Houthi militants on critical sites in Saudi Arabia, including energy infrastructure, and continued threats to oil flows through the Strait of Hormuz have put further upward pressure on oil prices.

“At least 17 vessels have been attacked since the 28 September. This is raising concerns in the shipping industry that risks taken to transit the strait are becoming too high,” Hynes said.

Downward pressure:

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 6 October – putting some downward pressure on Brent’s price.

Speculators sold a little over 3,000 lots as of 6 October, decreasing net-long positions in Brent futures to a little over 201,000 lots.

When speculators reduce net-long positions, oil prices tend to decline. Conversely, when they boost these positions, prices typically rise, leading to a cycle where their actions can influence oil prices and the market.

By Nachiket Tekawade and Aparupa Mazumder

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