Europe & Africa Market Update 18 Feb

Bunker fuel prices across European and African ports have fallen, and operations are proceeding normally in the Gibraltar Strait.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices unchanged in Rotterdam, and down in Gibraltar ($5/mt) and Durban ($5/mt)
• LSMGO prices down in Rotterdam ($21/mt) and Gibraltar ($8/mt)
• HSFO prices down in Durban ($11/mt), Gibraltar ($2/mt) and Rotterdam ($1/mt)
• B30-VLSFO prices down in Rotterdam and Gibraltar ($2/mt)

Conventional fuel prices have mostly declined across the three major ports, in line with Brent’s price.

Rotterdam’s LSMGO price has fallen more sharply compared to Gibraltar's. A lower-priced 150-500 mt stem fixed at $650/mt has put additional downward pressure on the benchmark.

This has widened Gibraltar’s price premium over Rotterdam’s LSMGO price by $13/mt over the past day.

Bunkering HSFO and VLSFO in Gibraltar is also around $23-$29/mt more expensive than Rotterdam.

Recommended lead time for LSMGO supplies in the Gibraltar strait ports has reduced to around 5-7 days, from 8-10 days advised last week, but VLSFO and HSFO supplies may still need around 8-10 days of notice, a trader said.

Weather is now more favourable in the Gibraltar strait.

In Gibraltar, congestion has cleared with just one vessel waiting for bunkers as of Wednesday morning, port agent MH Bland said.

The ports of Algeciras and Ceuta are also operating normally, according to MH Bland.

Brent

The front-month ICE Brent contract has declined by $0.33/bbl on the day, to trade at $67.61/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has held its ground after the US army seized another Venezuela-linked oil tanker allegedly carrying sanctioned oil.

The US Department of War (DoW) said in a statement that the Panamanian-flagged oil tanker Veronica III was seized in the Indian Ocean.

The move marks the second such incident in a week, according to Price Future Group’s senior market analyst Phil Flynn.

“Tracked all the way from the Caribbean, the vessel [Veronica III] was carrying nearly 2 million barrels [bbls] of crude and fuel oil linked to sanctioned Venezuelan networks,” Flynn said.

The US government has said it will continue its efforts to crack down on Venezuelan and Iranian oil trade, which the Donald Trump-led administration has deemed illicit.

Downward pressure:

Brent’s price has moved lower amid signs of a breakthrough in US-Iran nuclear negotiations, held in Geneva yesterday.

Washington and Tehran have reached an understanding on “guiding principles” aimed at discussing the latter’s nuclear enrichment programme, Reuters reported citing Iran’s Foreign Minister Abbas Araqchi.

Meanwhile, a representative from Washington said that Iran will submit a detailed proposal in the coming two weeks, in a step to take yesterday's discussions forward, Reuters reported.

However, it is important to note that yesterday’s discussions don’t mean that a final deal has been cracked between the two countries.

“The decline [in Brent’s price] was largely driven by reports that Iran has reached a “general agreement” with the US on the terms of a potential deal,” two analysts from ING Bank noted.

By Nachiket Tekawade and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online