Europe & Africa Market Update 29 June

Regional bunker benchmarks have moved in mixed directions over the weekend, while prompt fuel availability in the ARA bunkering hub remains tight.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes from Friday to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($3/mt) and down in Durban ($8/mt) and Rotterdam ($3/mt)
• LSMGO prices up in Rotterdam ($33/mt), unchanged in Gibraltar, and down in Durban ($15/mt)
• HSFO prices up in Rotterdam ($3/mt), and down in Gibraltar ($16/mt)
• B30-VLSFO prices up in Rotterdam ($29/mt)

VLSFO and HSFO prices in Rotterdam and Gibraltar have seen little change over the weekend.

Meanwhile, Rotterdam's LSMGO benchmark has jumped more sharply, compared with Gibraltar, where the LSMGO price has remained unchanged. A steeply higher-priced 50-150 mt stem, fixed at $922/mt, at the Dutch port has pushed the benchmark higher.

Consequently, Rotterdam’s price discount to Gibraltar has narrowed by $33/mt since Friday.

Bunker availability is very tight for prompt supplies in the ARA bunkering hub, with buyers being advised to book around seven days ahead for VLSFO and HSFO stems, and six days for LSMGO, a trader told ENGINE.

Fuel oil stocks in the ARA have gained around 8% since May’s inventory levels, which were the lowest in more than a decade, Insights Global data showed.

Brent

The front-month ICE Brent contract has inched $0.01/bbl higher on the day from Friday, to trade at $72.57/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has felt upward pressure amid renewed strikes in the Middle East.

Over the weekend, the US and Iran exchanged fire – further destabilising the region and threatening the fragile 60-day US-Iran peace deal.

Iran’s navy struck a Panama-flagged oil tanker that was attempting to transit the Strait of Hormuz on Saturday. The vessel was carrying over 2 million bbls of crude oil.

In response, the US Central Command (CENTCOM) launched strikes on Iranian military targets.

Simultaneously, the Israel Defense Forces (IDF) confirmed strikes on three command centers in Nabatieh and Mayfadoun in Lebanon, further complicating the geopolitical landscape that underpin the stability of the Middle East region.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a big rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US increased by seven to 440 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening, or expected to happen, in the shale sector.

By Nachiket Tekawade and Aparupa Mazumder

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