Europe & Africa Market Update 4 Dec

Bunker prices at major European and African ports have mostly remained steady, while prompt supply in the ARA hub are tight.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($2/mt), and down in Rotterdam ($2/mt) and Gibraltar ($1/mt)
• LSMGO prices unchanged in Gibraltar, and down in Rotterdam ($8/mt)
• HSFO prices up in Durban ($1/mt), and down in Rotterdam ($9/mt) and Gibraltar ($1/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $3/mt to $268/mt
• Gibraltar B30-VLSFO premium over VLSFO down by $6/mt to $352/mt

The HSFO price in Rotterdam has seen a steep fall. A lower-priced 150-500 mt stem, fixed at $350/mt, may have put downward pressure on the benchmark.

A comparatively modest dip in Rotterdam’s VLSFO price has widened the Hi5 spread at the port by $7/mt in the last session, bringing the spread to $50/mt.

Rotterdam’s LSMGO price has also seen a considerable fall, with a stem of less than 50 mt fixed at a low price of $629/mt weighing on the benchmark. This has narrowed Rotterdam’s discount to Gibraltar’s.

Prompt supplies in the ARA hub are tight, with buyers advised to book around 5-7 days ahead to get coverage from more suppliers, a trader said.

Brent

The front-month ICE Brent contract has risen by $0.18/bbl on the day, to trade at $63.02/bbl at 09.00 GMT.

Upward pressure:

Oil prices rose after Ukrainian strikes on Russia’s oil infrastructure raised concerns about supply disruptions and as stalled peace talks dampened hopes of a deal that could bring more Russian crude back to global markets.

Ukraine targeted the Druzhba pipeline in Russia’s Tambov region—its fifth strike on the route supplying Hungary and Slovakia—according to a Ukrainian military intelligence source cited by Reuters.

Prices were also supported by the sense that peace negotiations were going nowhere. US President Donald Trump’s team left discussions with the Kremlin without progress on ending the war, and Trump told reporters it remained uncertain what happens now, Reuters reported.

“Crude oil gained as talks between Russia and Ukraine fail to deliver a peace deal,” said ANZ Bank senior commodity strategist Daniel Hynes.

Brent futures slipped, as “US-led Ukraine peace efforts drag on and the market lacks a clear signal on how or when they might conclude,” noted Vanda Insights’ founder Vandana Hari.

Downward pressure:

Brent crude has come under slight downward pressure after the latest weekly report from the US Energy Information Administration (EIA).

The EIA said commercial US crude inventories rose by 574,000 bbls to 428 million bbls for the week ending 28 November. An increase of this kind usually signals softer demand, which can weigh on Brent prices.

By Nachiket Tekawade and Tuhin Roy

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