Europe & Africa Market Update 16 Feb

Bunker fuel prices across European and African ports have moved in mixed directions, and weather-related congestion eases at ports in the Gibraltar Strait.

IMAGE: Aerial view of Gibraltar Harbour with dark storm clouds in the background. Getty Images

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($9/mt) and Durban ($5/mt), and unchanged in Rotterdam
• LSMGO prices up in Gibraltar ($7/mt), and down in Rotterdam ($10/mt)
• HSFO prices up in Durban ($10/mt) and Gibraltar ($7/mt), and down in Rotterdam ($1/mt)
• B30-VLSFO prices up in Rotterdam ($17/mt) and Gibraltar ($7/mt)

The price of LSMGO at all ports in the Gibraltar strait have moved higher over the weekend.

Algeciras’ LSMGO price has moved $27/mt higher, now trading at a $19/mt premium over Gibraltar, compared to a $1/mt discount seen yesterday.

Ceuta’s LSMGO price has increased by $30/mt, making it $77/mt costlier than Gibraltar’s price.

All fuel grades are available in the Gibraltar strait, but the weather disruptions have increased lead times to around 8-10 days at the ports, a trader said.

Operations have resumed after a disruption during the weekend and there are just seven vessels currently awaiting bunkers at the port, port agent MH Bland said.

Brent

The front-month ICE Brent contract has lost by $0.17/bbl on the day from Friday, to trade at $67.42/bbl at 09.00 GMT.

Upward pressure:

Oil has retained some ground after official drilling figures showed a decline in US oil rigs.

The total number of oil rigs declined by three over the week at 409, according to Baker Hughes.

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.

In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

Downward pressure:

Brent crude’s price has come under downward pressure as market participants remained focused on the upcoming US-Iran nuclear talks, that is expected to ease supply-related concerns.

Representatives from both nations will hold a second round of talks in Geneva tomorrow, Reuters reported.

The talks primarily aim to discuss Tehran’s nuclear enrichment programme – something Washington has consistently opposed.

Iran is expected to reach an agreement with the US that could benefit both countries economically, Reuters further reported citing an Iranian diplomat.

The global oil market is facing considerable uncertainty, “over how the situation between the US and Iran evolves,” two analysts from ING Bank noted.

By Nachiket Tekawade and Aparupa Mazumder

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