Europe & Africa Market Update 15 Sep

Bunker prices in European and African ports have moved in mixed patterns, while prompt fuel availability is tight off Malta.

IMAGE: Tankers during a bunker operation off Malta. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices unchanged in Gibraltar, and down in Durban ($17/mt) and Rotterdam ($4/mt)
• LSMGO prices up in Gibraltar ($9/mt) and Rotterdam ($6/mt), and down in Durban ($43/mt)
• HSFO prices up in Rotterdam ($10/mt), and down in Durban ($10/mt) and Gibraltar ($7/mt)
• B30-VLSFO price down in Rotterdam ($7/mt)

LSMGO prices have shown modest gains in Rotterdam and Gibraltar in the past session. Piraeus’ LSMGO price has also increased, though more significantly, at $21/mt in the past day.

Conversely, the LSMGO price off Malta has dropped $37/mt over the same period.

Consequently, Malta’s LSMGO price has flipped to a $45/mt price discount to Piraeus, compared to a $13/mt premium observed yesterday.

Malta’s discount to Gibraltar’s LSMGO has widened by $46/mt in a single session, to $56/mt.

Malta’s VLSFO price has dropped $12/mt in the last session and is at a $23/mt price premium over Gibraltar and an $83/mt price discount to Piraeus.

Fuel availability is tight off Malta for prompt supplies, with buyers lead times of 5-7 days recommended to get deliveries of any fuel grade, a trader told ENGINE.

Brent

The front-month ICE Brent contract has inched $0.09/bbl lower on the day, to trade at $107.89/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has remained largely steady, continuing to trade above the $107/bbl threshold, as the conflict in the Middle East persists.

What started as a US-Iran confrontation, has rapidly metastasized into a regional crisis, prompted by the escalation between Yemen’s Iran-aligned Houthi militants and Saudi Arabia.

The Houthis have targeted Saudi Arabia’s military facilities and infrastructure this week, after hitting Riyadh’s crucial 1,200 km East-West Pipeline, a favourable alternative to export crude through the Red Sea terminal at Yanbu, to circumvent the Strait of Hormuz.

“Oil prices remain firmly supported, with that floor unlikely to give way until markets get clearer visibility on Saudi supply after the East–West pipeline shutdown,” two analysts from ING Bank noted.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts will keep an eye out for US crude stocks data scheduled for release later this week.

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

By Nachiket Tekawade and Aparupa Mazumder

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