Europe & Africa Market Update 23 Apr

Bunker benchmarks at European and African ports have gained, while supplies in the ARA need a 4-5-day notice.

IMAGE: Bunkering of vessel in the Port of Antwerp. Port of Antwerp

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($53/mt), Gibraltar ($27/mt) and Rotterdam ($22/mt)
• LSMGO prices up in Gibraltar ($54/mt) and Rotterdam ($39/mt)
• HSFO prices up in Rotterdam ($22/mt) and Gibraltar ($12/mt)
• B30-VLSFO price up in Rotterdam and Gibraltar ($35/mt)

Bunker benchmarks have mostly gained in the past session, tracking the rise in Brent.

Meanwhile, Antwerp’s VLSFO price has edged lower in the past day. Consequently, Antwerp’s VLSFO is now at an $8/mt discount to Rotterdam, compared to a $17/mt premium seen yesterday.

LSMGO price in Antwerp has also climbed more sharply compared to Rotterdam. This has flipped the Belgian port’s LSMGO to a $13/mt price premium over Rotterdam, compared to a $17/mt discount seen yesterday.

The Hi5 spreads at both ports remain at around $60-70/mt, offering a significant economic incentive to scrubber-fitted ships to bunker the lower-priced HSFO in the port.

Bunker sales in the Antwerp-Bruges have gained by around 40% in the first quarter, compared to the previous quarter, the port authority said.

Bunker availability in the ARA hub remains stable, but buyers are being advised to enquire about stems with a lead time of around 4-5 days, a trader said.

Brent

The front-month ICE Brent contract has gained by $4.58/bbl on the day, to trade at $104.00/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has surpassed $100/bbl as traffic through the Strait of Hormuz remains shut.

According to a Bloomberg report, only one bulk carrier attempted to exit the strait in the past 24 hours.

Iran’s Revolutionary Guards (IRGC) seized two container vessels yesterday, Reuters reported citing Iran’s semi-official Tasnim News Agency.

The move comes despite the ongoing ceasefire between Washington and Tehran and in response to the US Navy’s seizure of two Iran-linked vessels earlier this week and blockade of the Strait of Hormuz.

“Iran’s seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue,” two analysts from ING Bank noted.

Meanwhile, Israel’s military has continued attacking southern Lebanon, Reuters reported. The attacks come amid a separate ceasefire deal agreed between Beirut and Tel Aviv.

“The oil market is repricing expectations with little sign of progress in finding a resolution in the Persian Gulf,” ING Bank analysts said.

Downward pressure:

Brent’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a build in US crude oil stocks.

Commercial US crude oil inventories increased by 1.9 million bbls to about 466 million bbls in the week ending 17 April, according to data from the EIA.

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

“Energy Information Administration data continue to show that the US is exporting record amounts of oil,” ING Bank’s analysts said.

By Nachiket Tekawade and Aparupa Mazumder

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