Europe & Africa Market Update 22 Oct

Bunker fuel prices have risen across the board at European and African ports, while longer lead times for bunker deliveries are advised in Gothenburg and off Skaw.

IMAGE: Aerial view of Port of Gothenburg. Gothenburg Port Authority

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($17/mt), Rotterdam ($16/mt) and Gibraltar ($15/mt)
• LSMGO prices up in Gibraltar ($31/mt), Rotterdam and Durban ($26/mt)
• HSFO prices up in Gibraltar ($11/mt), Rotterdam ($9/mt) and Durban ($4/mt)
• B30-VLSFO price up in Rotterdam ($7/mt)

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

Meanwhile, the VLSFO price off Skaw has climbed down by $6/mt. A large, 500-1,500 mt stem, fixed at a low price of $758/mt, has put downward pressure on the Danish location’s benchmark.

The VLSFO price in Sweden’s Gothenburg has increased with the broader market by $16/mt in the past day. Consequently, Gothenburg’s VLSFO price is now trading at a $22/mt premium over Skaw's, compared to yesterday, when prices were almost at parity.

LSMGO prices in both ports have surged $46-58/mt over the past session.

Fuel availability is stable off Skaw and in Gothenburg, a trader said. Nonetheless, buyers are recommended to book around 10 days ahead to secure supplies in both locations, the trader added.

Rough southerly winds of above 30 knots and gusts as high as 50 knots, as well as swells as high as 3 metres are forecast off Skaw and in Gothenburg between 24-29 October. This may cause some disruption to bunker supplies in both locations.

Brent

The front-month ICE Brent contract has risen by $2.24/bbl on the day, to trade at $112.37/bbl at 09.00 GMT.

Upward pressure:

Brent futures have risen amid escalating tensions in the Middle East. Yemen-based Houthis struck several sites in Saudi Arabia on Wednesday, including King Fahd International Airport in Dammam, according to media reports. Saudi air defences intercepted a drone that was approaching a facility at Saudi Aramco’s Shaybah oilfield, Al Jazeera reported.

Following these attacks, the US administration has ordered some diplomats and their families to leave Saudi Arabia.

“Oil prices remain well bid, with ICE Brent back above $110/bbl this morning, following additional deadly attacks on Saudi Arabia,” analysts from ING Bank said.

Commercial US crude oil inventories fell by 3.1 million bbls to 412.5 million bbls in the week ending 16 October, according to data from the US Energy Information Administration (EIA). A decline in US crude stocks typically signals stronger demand and can offer some support to Brent’s price.

Downward pressure:

A sharp rise in Brent futures has been tempered by hopes of a breakthrough in US-Iran talks, aimed at resolving the Middle East conflict.

“Iran is prepared to give diplomacy another chance if we see strong evidence of a sincere desire by US to build trust & reach a just solution,” Iran’s foreign minister, Abbas Araghchi said on the social media platform X.

Additionally, the International Energy Agency (IEA) has expressed its willingness to release more oil from emergency stocks amid concerns over supplies from the Middle East.

By Nachiket Tekawade and Shilpa Sharma

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