Europe & Africa Market Update 29 Apr

Most bunker benchmarks at European and African ports have gained, while lead times of around 4-5 days are advised in the ARA.

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($59/mt), Rotterdam ($35/mt) and Gibraltar ($19/mt)
• LSMGO prices up in Gibraltar ($41/mt), and down in Rotterdam ($20/mt)
• HSFO prices up in Gibraltar ($18/mt) and Rotterdam ($14/mt)
• B30-VLSFO prices up in Rotterdam ($15/mt) and Gibraltar ($12/mt)

Regional bunker prices have mostly moved higher in the past day, tracking the rise in Brent’s price.

Meanwhile, Rotterdam’s LSMGO price has dropped over the past day. Two stems of around 50-150 mt fixed at low prices between $1,283-1,287/mt, and one stem of around 150-500 mt fixed at a low price of $1,270/mt, have put downward pressure on the price benchmark.

The LSMGO price in neighbouring Antwerp has surged by around $49/mt in the past day. This has narrowed Antwerp’s LSMGO price discount to Rotterdam by around $69/mt to just $25/mt in a single day.

Comparatively, VLSFO in Antwerp is offered at a $62/mt discount to Rotterdam.

Antwerp-Bruges’ bunker sales grew around 39% in the first quarter, compared to the previous quarter, the port authority’s official data said last week. VLSFO sales had increased the most by around 83% on the quarter.

A spokesperson from the port authority said a surge in bunker prices in Asia following the Iran conflict, compared with more moderate increases in Europe, may have drawn additional bunker demand to Antwerp-Bruges in the first quarter.

ENGINE’s price data showed Singapore’s VLSFO price premium over Antwerp spiked in March to around $450/mt but have stabilized to pre-conflict levels of below $100/mt in April.

Currently, bunker availability remains stable in the ARA, but buyers are advised to enquire around 4-5 days ahead to get good coverage from suppliers, a trader said.

Brent

The front-month ICE Brent contract has gained by $3.66/bbl on the day, to trade at $114.70/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has continued to trade higher amid persistent blockade of the Strait of Hormuz.

US President Donald Trump has ordered an extension of the Hormuz ​blockade, the Wall Street Journal reported citing officials.

Meanwhile, more than 20 Iranian oil tankers were diverted and anchored at Iran's Port of Chah Bahar yesterday, outside the Strait of Hormuz, US Central Command (CENTCOM) reported.

The vessel backlog between the Strait of Hormuz and the US blockade line indicates that Washington has succeeded in intercepting Iranian vessels, according to market analysts.

“Crude oil extended recent gains, as the market frets over the ongoing closure of the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “Stalled peace talks have raised the prospect of an indefinite disruption to oil supplies from the Persian Gulf,” he added.

Downward pressure:

The UAE will exit OPEC and OPEC+ from 1 May, the country's energy minister Suhail Al Mazrouei said in a statement yesterday.

The UAE’s national oil company, Abu Dhabi National Oil Company (ADNOC) has set a target to raise crude oil production capacity to 5 million b/d by 2027.

“The UAE’s exit from OPEC is a big blow to the group,” two analysts from ING Bank noted. “It’s the highest-profile exit from OPEC in recent years,” they said.

The UAE’s oil output is currently capped at 3.41 million b/d under the OPEC+ quota system.

“In the short term, this development has little impact on the market. But in the medium to longer term, it means more supply for the market,” ING Bank’s analysts noted.

By Nachiket Tekawade and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online