Europe & Africa Market Update 4 Nov

Bunker prices in major European and African ports have dropped, while prompt fuel availability is tight in the ARA ports.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Gibraltar ($67/mt), Rotterdam ($19/mt) and Durban ($9/mt)
• LSMGO prices down in Durban ($35/mt), Gibraltar ($14/mt) and Rotterdam ($12/mt)
• HSFO prices down in Rotterdam ($25/mt), Durban ($17/mt) and Gibraltar ($15/mt)
• B30-VLSFO price down in Rotterdam ($30/mt)

Bunker fuel prices have mostly over the past session, tracking Brent’s fall.

Gibraltar’s VLSFO price has slumped more sharply than Rotterdam’s. A lower-priced offer for a 500-1,500 mt stem, at $739/mt, has put additional downward pressure on the benchmark.

Consequently, Rotterdam’s VLSFO price has flipped from a $41/mt price discount to Gibraltar to a $7/mt premium in a single day.

Rotterdam’s LSMGO price is at a $64/mt discount to Gibraltar.

Meanwhile, B100 at the Dutch port is priced at $1,151/mt, a $207/mt price discount to LSMGO. That discount has widened by $128/mt in a single month.

The wide price discount has added a competitive advantage to B100 and increased its demand at Rotterdam, according to market sources.

Fuel availability is tight for prompt supplies in the ARA ports, with buyers advised lead times of 5-7 days to get good coverage from suppliers, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost by $2.89/bbl on the day, to trade at $103.53/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has found some support from an unexpected draw in US crude stocks and fresh clashes between the US and Iran.

US crude oil inventories fell by 5.3 million bbls in the week ending 30 October, according to estimates from the American Petroleum Institute (API).

A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Besides, Washington has attacked an Iranian anti-aircraft facility on Qeshm Island near the Strait of Hormuz, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Effective throughput of oil through the Strait of Hormuz has fallen to 56% of pre-conflict levels “and is trending lower,” Hynes added.

Downward pressure:

Brent’s price has come under downward pressure amid signs that the US is not planning an imminent return to major combat with Iran.

US President Donald Trump told the Financial Times yesterday that Washington had no immediate plans to strike Iran.

This week’s strikes on Qeshm Island appeared limited and did not signal a return to major combat operations, Reuters reported, citing a US official.

Trump’s comments came as his Republican Party lost control of both houses of Congress in yesterday’s US midterm elections – a vote the global oil market had been watching closely, after the US President threatened to resume strikes on Iran once it was over.

By Nachiket Tekawade and Aparupa Mazumder

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