Europe & Africa Market Update 20 July

European and African bunker benchmarks have moved in mixed directions, and fuel availability is tight for prompt supplies in the ARA.

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

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Durban ($35/mt), and down in Gibraltar ($13/mt) and Rotterdam ($2/mt)
• LSMGO prices up in Rotterdam ($28/mt), and down in Durban ($69/mt) and Gibraltar ($17/mt)
• HSFO prices up in Gibraltar ($2/mt), and down in Durban ($22/mt) and Rotterdam ($1/mt)
• B30-VLSFO prices up in Rotterdam ($30/mt)

Rotterdam’s LSMGO price has gained significantly since Friday, as a higher-priced 150-500 mt LSMGO stem, fixed at $1,158/mt, provided support.

Conversely, Gibraltar’s LSMGO benchmark has dropped considerably over the weekend.

Consequently, Rotterdam’s LSMGO price discount to Gibraltar has narrowed by $45/mt during the weekend to $79/mt on Monday.

Gibraltar’s VLSFO price has dropped more than Rotterdam’s benchmark, narrowing the Dutch port’s price premium by $11/mt to $12/mt.

Bunker fuel availability is tight for prompt delivery dates in the ARA ports, with buyers advised to enquire about stems between 5-7 days ahead to get good coverage, a trader said.

Brent

The front-month ICE Brent contract has gained by $3.11/bbl on the day from Friday, to trade at $88.22/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has continued to move higher this week as the US and Iran continue to exchange strikes – proving to be “deadly” for both sides, according to market analysts.

More commercial tankers came under attack while transiting the Strait of Hormuz over the weekend, the United Kingdom Maritime Trade Operations (UKMTO) reported.

At least two vessels were hit by unknown projectiles - causing fire and structural damages, the UKMTO reported.

Only two outbound visible oil tankers transited the Strait of Hormuz yesterday, two analysts from ING Bank said, citing LSEG data.

“[Oil] flows are essentially back to where they were before the [US-Iran] Memorandum of Understanding (MoU),” ING Bank’s analysts said.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by seven over the week, to 452 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Nachiket Tekawade and Aparupa Mazumder

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