Europe & Africa Market Update 5 June

Bunker prices across European and African ports have fallen, and deliveries in the ARA require longer lead times.

IMAGE: Bunkering of vessel in the Port of Antwerp. Port of Antwerp

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($24/mt), Rotterdam ($9/mt) and Gibraltar ($8/mt)
• LSMGO prices down in Durban ($60/mt), Rotterdam ($14/mt) and Gibraltar ($5/mt)
• HSFO prices down in Rotterdam ($23/mt), Durban ($20/mt) and Gibraltar ($17/mt)
• B30-VLSFO down in Rotterdam ($11/mt) and Gibraltar ($7/mt)

The price of LSMGO in Antwerp has gained by $10/mt in the last day, despite most other prices recording losses. A 50-150 mt LSMGO stem, fixed at a high price of $1,080/mt, has provided some support to Antwerp’s LSMGO benchmark.

Consequently, Antwerp’s discount to Rotterdam has narrowed by around $24/mt in the last day.

Fuel availability in the ARA remains tight for prompt deliveries, as longer lead times of around 10 days are advised for VLSFO and HSFO supplies, and a six-day notice is required for LSMGO deliveries, a trader said.

Tight availability of blending components is making it difficult to produce on-spec fuels consistently, a supplier told ENGINE last week.

Pilots in Belgian ports have announced a day-long strike against pension reforms, a shipping agent said. This is currently expected to disrupt pilotage services in the port area.

Brent

The front-month ICE Brent contract has declined by $1.58/bbl on the day, to trade at $95.00/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has felt some upward pressure as Iran said there has been “no tangible progress” in the ongoing negotiations with the US on a lasting ceasefire agreement that can ultimately reopen the Strait of Hormuz.

“No tangible progress has been achieved in the negotiation process,” Bloomberg quoted Iran’s foreign minister Abbas Araghchi as saying.

Despite Pakistan-mediated negotiations between Washington and Tehran to end hostilities, oil market analysts are sceptical as concrete details remain elusive.

“These on-again, off-again developments keep the market on edge,” Price Futures Group’s senior market analyst Phil Flynn said. “We’ll keep watching for actual implementation on the ground,” he added.

Downward pressure:

Brent’s price is on track to close the week with a decline following the US-brokered truce deal between Israel and Lebanon earlier this week.

Under the agreement, Tel Aviv and Beirut will immediately cease all regional hostilities.

Market analysts view this progress as a potential bridge to a comprehensive agreement with Tehran - a move essential to reopening the Strait of Hormuz.

“The oil market continues to trade on expectations of an imminent resumption in energy flows from the Persian Gulf,” two analysts from ING Bank noted.

By Nachiket Tekawade and Aparupa Mazumder

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