Europe & Africa Market Update 20 Oct

Bunker prices in major European and African ports have mostly gained, while fuel availability is stable in Hamburg.

IMAGE: The Port of Hamburg with the Elbe river. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($16/mt), Gibraltar ($12/mt) and Durban ($5/mt)
• LSMGO prices up in Rotterdam ($32/mt), Gibraltar ($21/mt) and Durban ($9/mt)
• HSFO prices up in Rotterdam ($23/mt) and Gibraltar ($12/mt), and down in Durban ($5/mt)

LSMGO prices in Rotterdam and Gibraltar have gained significantly over the past day, tracking Brent's gain.

The LSMGO price in Hamburg has surged more sharply by $46/mt, to $1,523/mt. A higher priced, 150-500 mt stem, fixed in the German port, has provided additional support.

This has increased Hamburg’s price premium over Rotterdam by $14/mt over the past session.

Fuel availability remains stable in the port of Hamburg, with lead times of five days sufficient to get deliveries of any fuel grade, a trader told ENGINE.

Brent

The front-month ICE Brent contract has gained $2.90/bbl on the day, to trade at $111.41/bbl at 09.00 GMT.

Upward pressure:

Iran has no choice but to exercise sovereignty over the Strait of Hormuz to protect its security, First Vice President Mohammad Reza Aref said yesterday, according to Iranian state news agency IRNA. He added that the US had caused the current situation and must pay for it.

Yemen’s Houthis said yesterday that they had launched missile and drone attacks on Saudi energy, airport and military targets, including an Aramco site in Yanbu and the Shaybah oilfield. Saudi authorities have not confirmed the attacks. Yanbu is Saudi Arabia’s main Red Sea export hub and lets crude bypass Hormuz.

Attacks on ships have kept a risk premium in Brent, with ship-tracking firm Kpler reporting at least 18 vessels attacked in the region over the past two weeks.

The escalation in strikes across the Middle East highlights the upside risks to oil prices, economic research firm Capital Economics said in a note last week.

Downward pressure:

Gulf crude flows have held up despite the attacks. US Energy Secretary Chris Wright told Fox News that flows had recovered to about 80% of their pre-war level, although refined product shipments remained constrained.

Iraq's crude exports have averaged more than 3.4 million b/d so far this month, its oil minister said. That is close to pre-war levels.

The US is also authorising the sale of sanctioned “dark fleet” tankers so they can carry crude legally, Wright said. The aim is to add tanker capacity and bring freight rates down, analysts at Dutch bank ING said.

If flows continue uninhibited, “the risk premium would likely erode slowly”, the analysts added, noting that there are no signs of this yet.

By Nachiket Tekawade and Erik Hoffmann

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