Europe & Africa Market Update 19 May

Prices across European and African ports have moved in mixed directions, while prompt supplies are tight 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 up in Gibraltar ($3/mt) and Rotterdam ($1/mt), and down in Durban ($22/mt)
• LSMGO prices down in Gibraltar ($48/mt), Durban ($8/mt) and Rotterdam ($1/mt)
• HSFO prices up in Rotterdam ($19/mt), Gibraltar ($5/mt) and Durban ($4/mt)
• B30-VLSFO prices up in Gibraltar ($12/mt), and down in Rotterdam ($2/mt)

Gibraltar’s LSMGO price has fallen much more sharply compared to Rotterdam’s LSMGO price, which has remained mostly unchanged.

A stem of around 150-500 mt fixed at a low price of $1,303/mt has put downward pressure on Gibraltar’s LSMGO price.

Consequently, Gibraltar’s price premium over Rotterdam has narrowed by around $47/mt in a single day.

Fuel availability remains tight for prompt delivery dates in the Gibraltar Strait ports, and buyers are recommended lead times of between 7-10 days for any fuel grade, a trader told ENGINE.

Some suppliers are running around 6-8 hours late on deliveries, while in neighbouring Algeciras, some suppliers may be running around a day behind schedule, port MH Bland said.

Rough easterly winds of around 25 knots are forecast in the port around 21-22 May, which could cause some bunker disruptions.

Brent

The front-month ICE Brent contract has gained by $0.35/bbl on the day, to trade at $110.39/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has held steady as ongoing negotiations between Iran and the US remain strained.

The White House said a proposal delivered by Iran on Sunday “lacked any meaningful improvement” from previous versions, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

The remarks come after US President Donald Trump threatened to resume military action against Iran while maintaining the US blockade in the Strait of Hormuz.

The oil market “remains extremely sensitive to Iran-related headlines amid current supply disruptions,” two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after Trump backtracked from his earlier hardline remarks to resume strikes on Iran.

The shift in Trump’s plan comes at the request of the Saudi Arabia, Qatar and the UAE, he claimed.

Oil prices pared some gains “after President Trump said he had called off a military attack on Iran due to serious negotiations taking place,” Hynes added.

By Nachiket Tekawade and Aparupa Mazumder

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