Europe & Africa Market Update 9 July

Regional bunker benchmark prices have dropped significantly, and fuel availability is stable off Malta.

IMAGE: Tankers during a bunker operation off Malta. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($88/mt), Gibraltar ($28/mt) and Rotterdam ($23/mt)
• LSMGO prices down in Durban ($123/mt), Rotterdam ($59/mt) and Gibraltar ($41/mt)
• HSFO prices down in Durban ($52/mt), Gibraltar ($28/mt) and Rotterdam ($7/mt)
• B30-VLSFO prices down in Rotterdam ($35/mt) and Gibraltar ($14/mt)

LSMGO benchmark prices have dropped more sharply in European ports than fuel oil benchmarks. Stems fixed at low prices have weighed down on LSMGO in Rotterdam and Gibraltar.

The price of LSMGO off Malta has dropped by $51/mt, to $1,078/mt, in the past day. A 50-150 mt stem, fixed at a low price of $1,069/mt, has weighed down on the benchmark. It offers a $22/mt price discount to Gibraltar.

ULSFO price off Malta has also fallen by $65/mt, to $962/mt. The change has been sharper compared to other ports in the Mediterranean.

Malta’s ULSFO now offers a $69/mt discount to Algeciras, and a $65/mt discount to Istanbul. ULSFO bunkers in Greece’s Piraeus cost $86/mt more.

Availability of ULSFO is normal off Malta but offered by a limited number of suppliers, a trader said. VLSFO and LSMGO availability is also stable, the trader added.

Meanwhile, ships calling in Gibraltar are facing congestion, with around 19 vessels currently awaiting bunkers due to lack of space, compared to just 11 yesterday, port agent MH Bland said.

Brent

The front-month ICE Brent contract has declined by $1.16/bbl on the day, to trade at $77.54/bbl at 09.00 GMT.

Upward pressure:

Brent has received some support as tensions between the US and Iran continued to escalate, with the US launching fresh strikes on Iran to keep the Strait of Hormuz open to shipping. The latest military action prompted Iranian retaliatory attacks on Kuwait and Bahrain.

“Fresh US strikes on Iran pushed oil higher this morning, with the latest escalation undermining confidence in the fragile ceasefire,” two analysts from ING Bank said.

Separately, Russia, on Wednesday, banned diesel exports through the end of July to stabilise its domestic fuel market after Ukrainian drone attacks on refineries triggered fuel shortages and sharp price increases, according to Reuters.

“Adding to supply concerns in the oil market, and specifically in middle distillates, Russia announced a ban on the export of diesel until the end of July,” ING Bank analysts added.

Downward pressure:

After a rapid increase in Brent yesterday, the price increase has slowed down and reversed slightly.

Market participants have also likely started assessing the impact of the fresh US strikes on Iran, which has weighed on market sentiment.

Brent came under some downward pressure after the US Energy Information Administration (EIA) released its latest weekly oil inventory data.

US commercial crude oil inventories rose by 3 million bbls to 411.4 million bbls in the week ending 3 July, according to the EIA.

By Nachiket Tekawade and Tuhin Roy

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