Europe & Africa Market Update 2 Sep

Bunker benchmark prices in European and African ports have mostly gained, and prompt fuel availability is tight in the ARA.  

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($34/mt), Gibraltar ($20/mt) and Durban ($17/mt)
• LSMGO prices up in Durban ($48/mt) and Gibraltar ($40/mt), and down in Rotterdam ($13/mt)
• HSFO prices up in Durban ($22/mt), Gibraltar ($19/mt) and Rotterdam ($18/mt)
• B30-VLSFO price remains unchanged in Rotterdam

Bunker benchmark prices have mostly increased over the past day, tracking the rise in Brent's price.

Conversely, Rotterdam’s LSMGO price has dropped $13/mt, most possibly pressured by a 150-500 mt stem, fixed at a low price of $1,200/mt.

Comparatively, Gibraltar’s LSMGO price has seen a sharp increase. This has sharply widened Rotterdam’s LSMGO price discount by $53/mt, to $188/mt in a single day.

Rotterdam’s VLSFO price has seen the steepest increase among the three major ports. A large 500-1,500 mt stem, fixed at a higher price of $700/mt, has supported the Dutch port’s benchmark price.

Rotterdam’s HSFO price has seen a smaller $18/mt increase over the last day. Consequently, the port’s Hi5 spread has widened by $16/mt to $144/mt.

Fuel availability is tight for prompt delivery dates in the ARA, with buyers advised booking around 5-7 days ahead to secure competitive offers for any fuel grade, a trader said.

Brent

The front-month ICE Brent contract has gained by $2.40/bbl on the day, to trade at $94.77/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has rallied as tensions between the US and Iran escalated this week.

Oil has reached its “highest level in more than a month,” as tensions in the Persian Gulf escalated further, two analysts from ING Bank noted.

The US Central Command (CENTCOM) has resumed strikes on Iranian assets, while Tehran has warned of major consequences if Washington continues its drone barrage in the region.

“Iran hit two oil tankers in the region yesterday. The US, meanwhile, carried out additional overnight strikes on Iranian targets, adding fresh geopolitical risk premium to the market,” ING Bank’s analysts added.

Downward pressure:

Brent’s price has come under some downward pressure following a positive statement from US secretary of energy Chris Wright.

‌Wright claimed ​that 17 ​million bbls of ⁠crude oil transited ​the Strait ​of Hormuz on Monday, Reuters reported.

The uptick in flows ​marked the ​highest level of ‌crude ⁠oil to pass through the narrow waterway in recent months, Reuters added citing Wright.

“When you factor in bypass volumes, it suggests Persian Gulf oil flows are above pre-war levels. But these numbers are uncertain,” ING Bank’s analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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