Europe & Africa Market Update 15 Jan

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

IMAGE: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Gibraltar, Durban ($7/mt) and Rotterdam ($5/mt)
• LSMGO prices up in Rotterdam ($4/mt), and down in Gibraltar ($2/mt)
• HSFO prices up in Rotterdam ($3/mt) and Durban ($1/mt), and down in Gibraltar ($2/mt)
• B30-VLSFO down in Gibraltar ($24/mt) and Rotterdam ($6/mt)

The price of VLSFO in Algeciras has fallen by $19/mt over the past day, pressured by two lower-priced stems of 150–500 mt and 500–1,500 mt, fixed at $423–$431/mt. This has widened Gibraltar’s premium over Algeciras by $12/mt in a single day.

The Mediterranean port's B30-VLSFO price premium over its VLSFO price has narrowed by $17/mt since yesterday.

Gibraltar’s B30-VLSFO price has slumped $24/mt over the last day, narrowing its premium over Rotterdam’s bio-blend price by $18/mt.

Delivery of B30 blends at Gibraltar may require around 10 days.

Availability of conventional fuel grades also remains tight for prompt supplies in all Gibraltar strait ports, and buyers are advised to enquire about stems with lead times of between 5-7 days to get competitive offers from a wider selection of suppliers, a trader said.

There are currently 20 vessels awaiting bunkers at Gibraltar, and some suppliers are requiring more than two days to deliver, port agent MH Bland said.

Brent

The front-month ICE Brent contract has lost by $0.36/bbl on the day, to trade at $64.51/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has drawn support from the ongoing hostilities in the Middle East.

Conflict-related risks in Iran – a core OPEC member – have intensified after US President Donald Trump threatened action over Tehran’s crackdown on protesters.

“The US National Security Council is due to meet Tuesday to prepare options for the president,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

“Oil prices are feeling the heat… on these supply disruption fears,” remarked Price Futures Group’s senior market analyst Phil Flynn.

Downward pressure:

Brent crude’s price retreated after the US Energy Information Administration (EIA) reported a sizeable increase in US crude stocks.

Commercial US crude oil inventories have increased by 3.4 million bbls to around 422 million bbls for the week ending 9 January, according to data from the EIA.

The EIA report was “relatively bearish” – marking the biggest increase in two months, according to Hynes.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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