Europe & Africa Market Update 18 Mar

Regional bunker benchmarks have mostly decreased in the past day, while rough weather has disrupted bunkering off Malta.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($24/mt), Gibraltar ($20/mt) and Rotterdam ($8/mt)
• LSMGO prices down in Gibraltar ($17/mt) and Rotterdam ($7/mt)
• HSFO prices down in Rotterdam ($23/mt) and Gibraltar ($7/mt)
• B30-VLSFO prices up in Gibraltar ($34/mt), and down in Rotterdam ($8/mt)

Conventional bunker fuel prices have dropped in the past session across the three major ports, tracking the Brent’s decline.

Rotterdam’s HSFO price has fallen more sharply than its VLSFO in the past session, increasing the port’s Hi5 spread by $15/mt during the session.

A lower-priced 150-500 mt HSFO stem, fixed at $686/mt, has put additional downward pressure on the Dutch port's HSFO benchmark.

Bunkering LSMGO in Rotterdam costs around $180/mt more than at Gibraltar.

Off Malta, the LSMGO price has edged around $7/mt higher in the past session, supported by a higher-priced 50-150 mt stem fixed at $1355/mt.

Bunkering LSMGO off Malta comes at a premium of around $355/mt to Gibraltar.

Meanwhile, bunkering operations off Malta have been cancelled due to rough weather in the area, shipping agent WMR told ENGINE. Deliveries are expected to remain suspended until tomorrow afternoon, WMR added.

This could lead to a backlog of supplies in the area, a trader told ENGINE.

Brent

The front-month ICE Brent contract has declined by $1.24/bbl on the day, to trade at $102.89/bbl at 09.00 GMT.

Upward pressure:

Brent crude has remained firm as the Middle East conflict enters its third week with no signs of easing.

Oil flows through the Strait of Hormuz remain tightly constrained, even as Iran gave permission to limited tanker transits.

“With no sign of de-escalation in the Middle East, Brent crude appears to have found a floor just above $100/bbl,” two analysts from ING Bank noted.

Meanwhile, the Israel Defense Forces (IDF) has claimed to eradicate Iran’s security chief Ali Larijani. The news has raised market concerns of an Iranian retaliation that could disrupt supply and send oil prices higher.

“Confirmation of the death of Iran’s security chief, Ali Larijani, only increases uncertainty for markets. It’s unlikely to lead to de-escalation,” ING Bank’s analysts added.

Downward pressure:

Brent’s price moved lower following a surprise build in US crude stocks.

US crude oil inventories rose by 6.6 million bbls in the week ending 13 March, according to estimates from the American Petroleum Institute (API).

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

The US Federal Reserve (Fed) will hold its Federal Open Market Committee (FOMC) meeting later today to discuss the prospects of interest rate cuts in the US – amid the ongoing war.

Notably, higher interest rates in the US can dampen demand growth and make dollar-denominated commodities, like oil, more expensive for holders of other currencies.

By Nachiket Tekawade and Aparupa Mazumder

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