Europe & Africa Market Update 20 Aug

Bunker prices in European and African ports have increased over the past day, while fuel availability is normal off Malta.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($17/mt), Gibraltar ($16/mt) and Rotterdam ($8/mt)
• LSMGO prices up in Durban ($43/mt), Gibraltar ($32/mt) and Rotterdam ($24/mt)
• HSFO380 prices up in Durban ($17/mt), Rotterdam ($14/mt) and Gibraltar ($13/mt)
• B30-VLSFO prices up in Gibraltar ($23/mt) and Rotterdam ($17/mt)

Regional bunker prices have recorded increases, tracking the rise in Brent.

The LSMGO and VLSFO prices off Malta have jumped $36/mt and $14/mt, almost similar to the gains in Gibraltar’s LSMGO and VLSFO prices.

Nonetheless, off Malta’s LSMGO price still maintains a $49/mt price premium over Gibraltar, while its VLSFO is $54/mt costlier than Gibraltar’s.

The price of ULSFO off Malta has increased $30/mt over the past day and offers a $35/mt discount to Istanbul’s ULSFO price, and a $24/mt discount to Piraeus’ ULSFO price.

Fuel availability is stable off Malta, and recommended lead times for VLSFO, ULSFO and LSMGO deliveries have decreased to 3-4 days, compared to last week, when VLSFO and ULSFO availability was tight for prompt supplies, a trader said.

Brent

The front-month ICE Brent contract has gained by $1.77/bbl on the day, to trade at $93.67/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price is headed towards the $95/bbl mark, as expectations of a peace accord between Washington and Tehran, leading to the reopening the Strait of Hormuz to commercial navigation, has collapsed completely.

The UAE has indefinitely frozen all trade with Iran, citing security risks, after Tehran's missiles hit Emirati waters.

The US President Donald Trump has threatened the imposition of tougher economic penalties on entities supporting Iranian economic activities, putting upward pressure on commodity prices.

“Oil prices extended their rally amid growing concerns over tighter US sanctions on Iran,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price rally was capped by a surprise rise in US crude stocks.

Commercial US crude oil inventories increased by 4.4 million bbls, to 429 million bbls in the week ending 14 August, according to data from the US Energy Information Administration (EIA).

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

The crude stocks build marked “a third consecutive weekly build and the highest level since May,” ING Bank’s analysts said.

By Nachiket Tekawade and Aparupa Mazumder

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