Europe & Africa Market Update 14 Sep

European and African bunker prices have risen across the board since Friday, with Rotterdam's LSMGO benchmark at a multi-year high, while bunker queues have thinned in Gibraltar.

IMAGE: Ship-to-ship bunkering in Gibraltar. Gibraltar Port Authority

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($25/mt), Durban ($21/mt) and Gibraltar ($20/mt)
• LSMGO prices up in Gibraltar ($75/mt), Rotterdam ($36/mt) and Durban ($16/mt)
• HSFO prices up in Rotterdam ($16/mt), Durban ($10/mt) and Gibraltar ($5/mt)
• B30-VLSFO price up $44/mt in Rotterdam

Regional bunker benchmarks have gained across all three ports over the weekend, tracking Brent's climb. Rotterdam's LSMGO price has risen $36/mt to $1,484/mt, its highest level in at least four years.

Gibraltar's LSMGO price has gained more, up $75/mt to $1,612/mt. That has widened its premium over Rotterdam to $128/mt, from $89/mt on Friday, recovering around half of the sharp narrowing seen at the end of last week.

Gibraltar's bunker queue has thinned sharply in the same period. Around five vessels were waiting to receive bunkers this morning, down from about 24 on Friday, port agent MH Bland said.

Conditions are tighter across the bay in Algeciras, where all four anchorages are congested and bunkering outside port limits is not permitted. Delays are longest in Las Palmas, where one supplier is running 36-48 hours behind.

Brent

The front-month ICE Brent contract has surged by $3.89/bbl on the day from Friday, to trade at $107.98/bbl at 09.00 GMT.

Upward pressure:

Brent crude's price has shot up this week, amid supply disruption concerns and repeated vessel attacks near the Strait of Hormuz.

Another commercial vessel, carrying 14 Indian seafarers, came under a missile attack off the coast of Oman yesterday, leaving one crewmember missing, India's Ministry of External Affairs reported.

Separately, Saudi Arabia has temporarily ceased flows via its 1,200 km East-West Pipeline, after Yemen's Iran-aligned Houthi militants targeted it last week. The news has put further upward pressure on Brent's price.

"Following last week's developments, it's not surprising that oil prices are trading higher," two analysts from ING Bank noted.

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 increased by one over the week to 450 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 Erik Hoffmann and Aparupa Mazumder

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