Europe & Africa Market Update 20 May

Prices across European and African ports have moved in mixed directions, while prompt supply is challenging in Las Palmas.

IMAGE: Ships docked in the Port of Las Palmas, Gran Canaria, Spain. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($39/mt), Rotterdam ($12/mt) and Gibraltar ($6/mt)
• LSMGO prices up in Gibraltar ($6/mt), and down in Rotterdam ($18/mt)
• HSFO prices down in Gibraltar ($12/mt) and Rotterdam ($10/mt)
• B30-VLSFO prices down in Rotterdam ($40/mt) and Gibraltar ($37/mt)

Regional bunker benchmarks have mostly fallen in the past day, tracking Brent’s loss.

Conversely, Gibraltar’s LSMGO price has edged higher, widening its price premium over Rotterdam by $24/mt in a single day.

Las Palmas’ LSMGO price has dropped by $30/mt in the past day. A 150-500 mt stem fixed at a lower price of $1,307/mt has put downward pressure on the benchmark price. This has flipped the benchmark from a $12/mt premium over Gibraltar to a $12/mt discount.

A 500-1,500 mt VLSFO stem fixed in Las Palmas at a lower price of $790/mt has pushed the port’s benchmark $30/mt lower.

VLSFO is priced $19/mt lower in Las Palmas than in Gibraltar today, compared to a $17/mt premium observed yesterday.

Bunker availability is tight in the Canary Islands bunkering hub, with buyers advised to enquire about stems with a lead time of around 7-10 days to get deliveries of any fuel grade, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost by $1.65/bbl on the day, to trade at $108.74/bbl at 09.00 GMT.

Upward pressure:

US crude oil inventories declined by a 9.1 million bbls in the week ending 15 May, according to the latest US inventory report by the American Petroleum Institute (API). The decline exceeded market expectations of a 3.4 million-bbl draw.

A decline in US crude stocks could indicate improved demand for oil and can put some upward pressure on Brent's price.

“We’re [the US] exporting record volumes of crude (hitting over 5-6 million barrels per day in recent weeks as global buyers flock to U.S. barrels), which is tightening domestic balances,” remarked Price Futures Group’s senior market analyst Phil Flynn.

Downward pressure:

Brent crude’s price has edged lower as market participants balance the risk of renewed US strikes on Iran against hopes for a potential peace agreement, according to analysts.

The North Atlantic Treaty Organization (NATO) is discussing ways to helps commercial ships pass through the Strait of Hormuz, if the waterway is not reopened by early July, Bloomberg reports.

Meanwhile, US Vice President JD Vance said talks with Tehran have “made a lot of progress” and neither side wants to see renewed military actions, Reuters reports.

“Oil no longer trades purely on barrels. It trades on confidence that the shipping lanes of global capitalism remain open for business,” SPI Asset Management managing partner Stephen Innes said.

By Nachiket Tekawade and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online