Europe & Africa Market Update 27 Oct

Regional bunker prices have risen over the past day, while Las Palmas’ VLSFO price has slipped on a lower-priced offer.

IMAGE: Cargo vessel in the Port of Las Palmas, Canary Islands. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($18/mt), Gibraltar ($12/mt) and Durban ($4/mt)
• LSMGO prices up in Durban ($65/mt), Rotterdam ($52/mt) and Gibraltar ($48/mt)
• HSFO prices up in Durban ($31/mt), Gibraltar ($27/mt) and Rotterdam ($25/mt)

Despite a majority of the market recording gains, Las Palmas’ VLSFO price has slipped $9/mt in the past day, weighed down by a lower-priced offer at $829/mt for a large stem of between 500-1,500 mt.

Since Gibraltar’s VLSFO price has gained with the broader market, the price premium of Las Palmas over Gibraltar has narrowed by $21/mt in the past day.

Las Palmas’ HSFO price has increased $35/mt in the past day, narrowing the port’s Hi5 spread by $44/mt.

Compared with Gibraltar, Las Palmas’ LSMGO price has made a smaller gain of $20/mt. A lower-priced stem, fixed at $1,537/mt, has limited the gain. This has widened Las Palmas’ LSMGO discount to Gibraltar by $28/mt over the past day.

Fuel availability is tight in Las Palmas, with buyers advised lead times of between 10-12 days to secure deliveries of any fuel grade, a trader told ENGINE.

Brent

The front-month ICE Brent contract has gained by $1.20/bbl on the day, to trade at $115.68/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt upward pressure as speculators have raised their bullish bets and supply concerns in the Middle East persist.

Money managers and hedge funds bought a little short of 9,000 lots in the week to 20 October, increasing their net-long positions in ICE Brent futures to over 241,000 lots, according to futures and options data from ICE Futures Europe.

When speculators boost net-long positions, oil prices typically rise.

Persian Gulf crude exports have fallen to 14.30 million b/d, while oil flows through the Strait of Hormuz are running at just 60% of normal levels, ANZ Bank’s senior commodity strategist Daniel Hynes said.

The oil market’s resilience “remains under acute pressure”, Hynes added.

Downward pressure:

Brent’s gains have been capped by renewed diplomatic efforts to ease tensions in the Middle East.

Senior officials from Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran yesterday, and the four countries agreed to continue talks, Reuters reported, citing Iranian state media.

By Nachiket Tekawade and Aparupa Mazumder

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