Europe & Africa Market Update 12 Mar

Prices have moved up in European and African ports, and ARA suppliers are seeing high demand.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($103/mt), Rotterdam ($95/mt) and Gibraltar ($44/mt)
• LSMGO prices up in Gibraltar ($103/mt) and Rotterdam ($97/mt)
• HSFO prices up in Gibraltar ($73/mt) and Rotterdam ($43/mt)
• B30-VLSFO prices up in Gibraltar ($68/mt) and Rotterdam ($64/mt)

Rotterdam’s VLSFO price has surged more steeply compared to its HSFO price, more than doubling the port’s Hi5 spread to around $96/mt in a single day. This increases the economic incentive for scrubber-fitted ships to bunker the cheaper priced HSFO.

All fuel grades are seeing high demand in the ARA hub and buyers are advised to enquire about stems as early as possible, according to a supplier.

One supplier said it can deliver all fuel grades promptly. Another supplier said it can deliver VLSFO in Antwerp earliest by 23 March, a trader said.

Meanwhile, pilots have been on strike in Belgian ports since last evening. Vlissingen’s pilot service is expected to resume on a limited basis today, shipping agent VertomCory Antwerp said.

The disruption caused due to the strike has led to some congestion at the port. As of the latest update, around 52 inbound vessels and 39 outbound vessels were waiting without prospects in Antwerp, VertomCory said.

In Zeebrugge, around 6 outbound vessels and 13 inbound vessels were stranded, the shipping agent said.

Brent

The front-month ICE Brent contract has gained by $6.89/bbl on the day, to trade at $97.89/bbl at 09.00 GMT.

Upward pressure:

Brent has moved closer to $100/bbl mark once again, following major disruptions in the Persian Gulf.

Over last night, two tankers caught fire after being struck by Iranian missiles in Iraqi territorial waters, according to Iraq’s national oil marketer State Oil Marketing Company (SOMO).

Iraq’s oil ports have completely ceased operations following the attacks, Reuters reported.

The latest attacks mark an escalation in the Middle East conflict, raising the number of vessels struck in the region ‌to at least 16, the report added.

“There are no signs of de-escalation in the Persian Gulf, so there is no end in sight to the disruptions to oil flows through the Strait of Hormuz,” two analysts from ING Bank said.

Downward pressure:

Brent’s price rally somewhat eased after the US Energy Information Administration (EIA) reported a surge in US crude stocks.

Commercial US crude oil inventories increased by 3.8 million bbls to 443 million bbls in the week ending 6 March, according to data from the EIA.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

By Nachiket Tekawade & Aparupa Mazumder

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