Europe & Africa Market Update 26 Feb

Bunker fuel prices across European and African ports have moved in mixed directions, while prompt VLSFO, LSMGO and biofuel supplies are tight in the ARA hub.

IMAGE: View of the entrance to the Port of Rotterdam, Netherlands. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($3/mt), Rotterdam and Gibraltar ($1/mt)
• LSMGO prices up in Rotterdam ($1/mt), and down in Gibraltar ($2/mt)
• HSFO prices up in Gibraltar ($2/mt), unchanged in Rotterdam, and down in Durban ($7/mt)
• B30-VLSFO prices up in Rotterdam ($1/mt), and unchanged in Gibraltar

Amsterdam’s LSMGO price has gained $21/mt in the past day. A higher priced 50-150 mt stem fixed at $755/mt has provided support.

Conversely, LSMGO in Antwerp has declined $13/mt, after potentially facing downward pressure from a lower-priced 150-500 mt stem, fixed at $693/mt.

As a result of these price moves, the Belgian port’s discount to Amsterdam has widened by around $34/mt in a single day.

HSFO and VLSFO prices at all ARA ports remain near parity.

Getting prompt deliveries of VLSFO and LSMGO in the ARA hub remains challenging, with 5-7-day notices recommended to avoid high premiums, a trader told ENGINE. HSFO deliveries can be carried out comparatively faster, within 2-3 days.

B30-VLSFO blends in Rotterdam offer a discount of around $42/mt to Antwerp, while they are $91/mt cheaper compared to Gibraltar. Also, B30-LSMGO supplies in Rotterdam offer a discount of around $215-227/mt to Lisbon and Piraeus.

All biofuel deliveries in the ARA may require around 7-10 days of notice, a trader told ENGINE.

Brent

The front-month ICE Brent contract has declined by $0.23/bbl on the day, to trade at $70.83/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has felt some upward push over supply disruption concerns as US envoys, Steve Witkoff and Jared Kushner, meet representatives from Iran for a third round of indirect talks later today in Geneva.

“It’s a big day for oil markets with all eyes on US-Iran nuclear talks,” two analysts from ING Bank said.

Both countries are expected to discuss Iran’s nuclear capabilities – something Washington has repeatedly opposed.

“The principle is very simple: Iran cannot have a nuclear weapon,” Reuters cited US Vice President JD Vance as saying.

Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil – which faces disruption threats if a deal is not finalised, market analysts said.

“Longer-term action from the US, with more aggressive retaliation from Iran, would increase supply risks for the oil market. This would make any further price increases more sustainable,” ING Bank’s analysts added.

Downward pressure:

Brent’s price has come under downward pressure after the US Energy Information Administration (EIA) reported a massive increase in US crude stocks.

Commercial US crude oil inventories have increased by 16 million bbls to 436 million bbls for the week ending 20 February, according to data from the EIA.

“The increase was dominated by inventory builds on the [US] Gulf Coast,” ING Bank’s analysts said.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

The EIA data comes one day after the American Petroleum Institute (API) reported a staggering 11.4 million-bbl rise in US crude stocks.

By Nachiket Tekawade and Aparupa Mazumder

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