Europe & Africa Market Update 5 Feb

Fuel prices across European and African ports have increased, while rough weather has caused a suspension in bunkering operations at Ceuta.

IMAGE: Two ships at Levante dock in Ceuta. Port of Ceuta

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($13/mt), Durban ($9/mt) and Gibraltar ($8/mt)
• LSMGO prices up in Gibraltar ($8/mt) and Rotterdam ($6/mt)
• HSFO prices up in Rotterdam ($10/mt), Gibraltar ($8/mt) and Durban ($1/mt)
• B30-VLSFO prices up in Gibraltar ($15/mt) and Rotterdam ($6/mt)

Ceuta’s LSMGO price has surged $73/mt over the past session. A higher-priced stem of around 50-150 mt, fixed at $841/mt, has supported the increase. Bunkering LSMGO at Ceuta now costs $84/mt more than in Gibraltar, compared to a $19/mt premium yesterday.

All operations remain suspended at Ceuta due to rough weather, port agent MH Bland said. Consequently, buyers are requested to provide a lead time of five days for ex-pipe deliveries, while barge deliveries can be carried out earliest by around 14 February, a trader said.

At the nearby Port of Gibraltar, congestion is ticking up as inbound traffic remains suspended, with around 23 vessels currently awaiting bunkers, MH Bland said.

Operations in neighbouring Algeciras remain suspended as well, the port agent said.

Brent

The front-month ICE Brent contract has increased by $1.06/bbl on the day, to trade at $68.24/bbl at 09.00 GMT.

Upward pressure:

Brent crude prices have edged higher, following the release of the US Energy Information Administration’s (EIA) weekly oil inventory data.

US commercial crude oil inventories fell by 3.5 million bbls to 420.3 million bbls in the week ending 30 January, according to the EIA. Declining inventories are widely interpreted as a sign of stronger demand.

“Sentiment was also boosted by a drop in inventories,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“The US Energy Information Administration’s weekly report for the week to January 30 was bullish on balance,” added Vandana Hari, founder of VANDA Insights.

Additional support for Brent futures has come from a trade agreement between the US and India, which has raised expectations of firmer global energy demand.

Downward pressure:

Oil prices have come under modest downward pressure after the US and Iran agreed to hold talks in Oman on Friday, easing fears that a possible military confrontation could disrupt oil supplies from the strategically important Middle East, Reuters reported.

Crude futures lost momentum “after the US and Iran agreed to hold talks on Friday, following earlier indications that negotiations had been called off amid differences over the venue and agenda,” said Vandana Hari, founder of VANDA Insights.

Additional pressure has come from a stronger US dollar and heightened volatility in precious metals.

A firmer dollar typically weighs on oil prices by making dollar-denominated commodities more expensive for buyers using other currencies, which can dampen demand.

By Nachiket Tekawade and Tuhin Roy

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