Europe & Africa Market Update 2 Mar
Bunker fuel prices across European and African ports have moved sharply higher, while prompt supplies are tight in the Gibraltar strait ports.
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 Durban ($67/mt), Gibraltar ($56/mt) and Rotterdam ($49/mt)
- LSMGO prices up in Gibraltar ($83/mt) and Rotterdam ($80/mt)
- HSFO prices up in Durban ($67/mt), Rotterdam ($55/mt) and Gibraltar ($48/mt)
- B30-VLSFO prices up in Rotterdam ($87/mt) and Gibraltar ($86/mt)
Bunker prices in all European and African ports have jumped sharply, triggered by a steep climb in the Brent price.
Ceuta’s VLSFO price has gained lesser than in Gibraltar, while its HSFO price has gained more than in Gibraltar. Consequently, the Hi5 spread in Ceuta has narrowed by $27/mt during the weekend and is currently around $37-38/mt narrower than in Gibraltar and Algeciras.
Fuel availability remains tight in all three Gibraltar strait ports, with around 5-7 days of lead time recommended for LSMGO, and 8-10 days of notice required for HSFO and VLSFO supplies, a trader said.
The Gibraltar Port Authority has issued a weather warning as rough winds of more than 25 knots and waves around 2 metres high are forecast in the area.
In Gibraltar, only the northern half of the anchorage is operational due to the high swells, port agent MH Bland said. Most suppliers are facing delays of more than a day on supplies, and around 16 ships are currently awaiting bunkers in the port, the port agent added.
In Algeciras, bunker barges are requesting supplies to be carried out in the inner anchorage due to bad weather, MH Bland said.
All anchorage operations are suspended in Ceuta, while supplies can be carried out ex pipe subject to the pilot’s approval, the port agent said.
Brent
The front-month ICE Brent contract has surged by $7.91/bbl on the day from Friday, to trade at $79.09/bbl at 09.00 GMT.
Upward pressure:
Brent crude’s price has risen by almost $8/bbl after US and Israeli forces launched a joint military attack on Iran, reportedly killing the Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei.
Iran did not take long before launching a multitude of strikes, targeting US military bases as well as residential areas across several countries in the Middle East.
The move was largely expected by oil market analysts, as representatives from both sides failed to reach a breakthrough in earlier rounds of indirect nuclear talks in Geneva.
“The breakdown of talks leading to an escalation of the conflict has the biggest implications for the oil market,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
OPEC’s de-facto leader Saudi Arabia's state oil company Aramco halted its Ras Tanura refinery after it was hit by a drone earlier today, Reuters reported.
Meanwhile, Israel has launched fresh air strikes targeting Iran-backed Hezbollah militants in Lebanon – escalating tensions on the third day of cross-border strikes.
All eyes will likely remain on any new developments in the Strait of Hormuz, according to market analysts.
“With the retaliatory action now evolving to attacks on oil tankers in the Strait of Hormuz, the threat on oil supplies has substantially risen,” Hynes added.
Downward pressure:
While there are no significant downward pressures on Brent’s price today, market participants await the next US crude stocks report.
Last week, the US Energy Information Administration (EIA) reported a massive 16 million bbls increase in US crude stocks.
A rise in US crude stocks can indicate slow demand for oil and drag Brent's price lower.
Besides, eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have collectively agreed to increase oil output by 206,000 b/d in April.
The move could exert downward pressure on Brent, by fueling concerns over a potential supply glut.
By Nachiket Tekawade and Aparupa Mazumder
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