Europe & Africa Market Update 6 Aug

Bunker prices have moved in mixed directions, while fuel availability is tight for prompt supplies in Piraeus.

IMAGE: The Port of Piraeus in Athens, Greece. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($9/mt) and Gibraltar ($7/mt), and down in Rotterdam ($39/mt)
• LSMGO prices down in Durban ($24/mt), Rotterdam and Gibraltar ($14/mt)
• HSFO prices up in Gibraltar ($2/mt), and down in Durban ($9/mt) and Rotterdam ($4/mt)
• B30-VLSFO price up in Rotterdam ($8/mt)

Piraeus’ LSMGO price has tanked $145/mt over the past day. A 150-500 mt stem, fixed at a low price of $1,209/mt, has weighed down on the benchmark.

This has flipped Piraeus' LSMGO to a $31/mt price discount to off Malta, compared to a $101/mt premium observed just yesterday. Meanwhile, Piraeus’ LSMGO price premium over Gibraltar’s LSMGO has narrowed by $131/mt in a single day to just $16/mt.

Despite the slump, Piraeus’ LSMGO price has increased 17% since 6 July, while off Malta’s and Gibraltar’s LSMGO prices have gained 21-23% in the same period.

Piraeus’ VLSFO price has dropped $24/mt in the past day, possibly pressured by a 150-500 mt lower priced stem fixed at $768/mt. Piraeus’ VLSFO price maintains $84-86/mt price premiums over VLSFO prices off Malta and in Gibraltar.

Fuel availability is tight in Piraeus for prompt supplies, with buyers advising seven days of lead time for HSFO, VLSFO and LSMGO supplies, and five days for ULSFO deliveries, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost by $0.80/bbl on the day, to trade at $79.50/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has felt some upward pressure as the broader Middle East conflict, extending to the Red Sea, escalated.

Yemen’s Iran-aligned Houthi militants have struck multiple cargo ships in the Red Sea this week, causing one vessel to capsize and sink.

The India-flagged oil tanker MSV Faize Noore Oliya drowned off the coast of Yemen in the Red Sea yesterday, after being hit by a projectile.

Threats in the Red Sea persist, despite ongoing diplomatic channels between Washington and Tehran, prompting several tankers carrying Saudi crude to take a U-turn ahead of the Bab al-Mandeb Strait.

Market optimism “was tempered by reports that Houthi militants had targeted a Saudi Arabian oil tanker,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price has slipped below $80/bbl mark as the global oil market awaits a final decision from Iran and Oman, on a draft agreement to reopen the Strait of Hormuz to commercial vessels.

The agreement is in its “final stage,” according to an Iranian official speaking to the Associated Press.

If finalised, the agreement has a potential to reopen the critical waterway – easing some pressure on the world economy.

“Crude oil extended recent losses, as signs of a deal on the reopening of the Strait of Hormuz intensified,” Hynes added.

By Nachiket Tekawade and Aparupa Mazumder

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