Europe & Africa Market Update 9 Jan

Bunker prices across European and African ports have considerably gained, while Istanbul faces weather-related disruptions.

IMAGE: Aerial view of a cargo ship in transit in Istanbul, Türkiye. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($19/mt), Durban ($18/mt) and Rotterdam ($16/mt)
• LSMGO prices up in Gibraltar ($26/mt) and Rotterdam ($17/mt)
• HSFO prices up in Gibraltar ($15/mt), Durban ($13/mt) and Rotterdam ($6/mt)
• B30-VLSFO up in Rotterdam ($33/mt) and Gibraltar ($28/mt)

Bunker fuel prices have surged in all three major ports, tracking Brent's uptick.

Rotterdam’s HSFO price experienced some downward pressure from a lower-priced 150-500 mt stem, fixed at $346/mt, limiting its gains.

Similarly, Istanbul’s LSMGO price has inched just $2/mt higher, compared to surges seen at other ports. A lower-priced 150-500 mt stem, fixed at $665/mt, has capped gains for the benchmark.

This has narrowed Istanbul’s price premium over Gibraltar by $24/mt in a single session.

The Turkish port is facing rough weather with winds of more than 30 knots along with high swells of more than 2.5 metres forecast between 9-11 January. Disruptions to bunkering operations are expected at the port, a local supplier said.

Consequently, one supplier said it can now deliver stems of any fuel grade earliest by 15 January, a trader said. 

Brent

The front-month ICE Brent contract has gained by $2.38/bbl on the day, to trade at $62.48/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has moved higher after the US Coast Guard seized two tankers, allegedly carrying sanctioned Venezuelan oil.

The first tanker, MV Bella 1, was seized in the northern Atlantic Ocean, while the second vessel, MT Sophia, was captured in the Caribbean Sea.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” two analysts from ING Bank said.

The move comes days after Washington detained Venezuelan President Nicolas Maduro from the country’s capital Caracas.

“This action adds some supply risk to the market in the short term,” ING Bank’s analysts added.

Downward pressure:

Brent’s price gains were partially capped by uncertainty surrounding Venezuela’s oil assets, according to market analysts.

Earlier this week, US President Donald Trump said Venezuela’s interim administration will be “turning over” between 30 million to 50 million bbls of sanctioned oil, to be sold at the market price.

The end of Maduro's presidency in Venezuela could add fresh barrels to an already oversupplied market, analysts said.

“A smooth transition means the potential for stronger Venezuelan supply,” ING Bank’s analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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