Europe & Africa Market Update 15 Oct

Bunker prices in European and African ports have moved in mixed directions, and supplier delays are seen at the ports in the Gibraltar Strait due to congestion.

IMAGE: Stormy clouds above the bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($38/mt), Gibraltar ($7/mt) and Rotterdam ($2/mt)
• LSMGO prices up in Gibraltar ($12/mt) and Rotterdam ($7/mt), and down in Durban ($50/mt)
• HSFO prices up in Gibraltar ($17/mt), and down in Rotterdam and Durban ($7/mt)

Gibraltar’s VLSFO price has dropped slightly, while its HSFO price has recorded gains. This has narrowed the Hi5 spread significantly by $24/mt in a single day, to just $3/mt.

Gibraltar’s LSMGO price has gained $12/mt in the last day, while the price has dropped $37/mt in neighboring Algeciras.

This flipped Gibraltar to a $35/mt premium to Algeciras, compared to a $14/mt discount seen yesterday.

Fuel availability is tight at the ports in the Gibraltar Strait for prompt supplies, with buyers recommended 7-10 days lead time for good coverage, a trader said.

Gibraltar is seeing rough wind gusts of around 25 knots and swells higher than 1.5 meters.

The port is slightly congested with around 10 vessels currently awaiting bunkers, port agent MH Bland said. Some suppliers are delayed on deliveries by 12-16 hours, while some are delayed by 4-6 hours, the port agent added.

In neighboring Algeciras, suppliers are delayed by between 2-12 hours, MH Bland said.

In Ceuta, all operations are suspended at anchorage due to adverse weather conditions, while ex-pipe supplies remain operational, depending upon pilot’s approval, MH Bland said. Barge supplies in Ceuta may face delays if congestion is seen after operations resume, the agent said.

Brent

The front-month ICE Brent contract has dropped by $1.23/bbl on the day, to trade at $104.10/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt some upward pressure from a sharp draw in US crude oil inventories.

US crude oil inventories decreased by 11.12 million bbls in the week ending 9 October, according to estimates from the American Petroleum Institute (API).

A draw in US crude stocks typically indicates stronger demand for oil and can support Brent’s price.

Two container ships were struck by unknown projectiles while transiting the Strait of Hormuz, the United Kingdom Maritime Trade Operations (UKMTO) agency reported yesterday. Both vessels reported minor damage and continued their passage.

Iran’s focus is shifting beyond the Strait of Hormuz, with attacks on vessels in the Gulf of Oman and around the port of Fujairah becoming more common, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has pressure weighing it down after the US signalled it could ease sanctions on shadow fleet vessels.

The Donald Trump-led US administration is considering easing sanctions on vessels that have carried oil from countries including Russia, Iran and Venezuela, in a bid to cut record freight costs, Reuters reported citing a US official.

Recovering supply from the Persian Gulf has also capped Brent’s gains today. Crude oil exports from Gulf producers rose by 4.4 million b/d to 13.90 million b/d in September, more than 75% of pre-war levels, the International Energy Agency (IEA) said in its monthly oil market report yesterday.

The IEA also expects global oil demand to fall by 2.60 million b/d this year, as higher oil prices and a weaker economic outlook weigh on consumption.

By Nachiket Tekawade and Aparupa Mazumder

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