Europe & Africa Market Update 16 Mar

Regional bunker benchmarks have moved in mixed directions, while demand remains strong in Piraeus.

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

Changes on the day, from Friday, to 09.00 GMT today:

• VLSFO prices up in Durban ($331/mt), and down in Gibraltar ($18/mt) and Rotterdam ($11/mt)
• LSMGO prices up in Rotterdam ($13/mt), and down in Gibraltar ($1/mt)
• HSFO prices up in Gibraltar ($36/mt), and down in Rotterdam ($19/mt)
• B30-VLSFO prices up in Gibraltar ($26/mt) and Rotterdam ($9/mt)

Gibraltar’s VLSFO price has declined over the weekend, while its HSFO price has risen. Consequently, the port’s Hi5 spread has narrowed by $54/mt to just $14/mt now.

This significantly reduces the economic incentive for scrubber-fitted ships to bunker cheaper HSFO in the port.

By comparison, the Hi5 spread in Greece’s Piraeus remains little changed at $120/mt, as both HSFO and VLSFO prices have increased in equal measure at the port.

Piraeus’ LSMGO price has also gained by $59/mt over the weekend, while Gibraltar’s LSMGO has remained almost unchanged. This has narrowed Piraeus’ LSMGO discount to Gibraltar by $60/mt to $146/mt.

Fuel availability of all grades remains normal in Piraeus, a source said. Bunker demand remains strong in the Greek port, the source added, which could tighten prompt availability of HSFO and LSMGO due to limited barge availability.

Brent

The front-month ICE Brent contract has gained by $5.08/bbl on the day from Friday, to trade at $105.27/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has remained well above $100/bbl as Middle East tensions flared over the weekend.

US forces hit Iranian military bases on the strategic Kharg Island over the weekend, escalating concerns over oil supplies.

Kharg Island handles “more than 80% of Iran’s oil exports,” according to ANZ Bank’s senior commodity strategist Daniel Hynes.

Elsewhere, oil loading operations have been suspended at the UAE port of Fujairah after an Iranian drone strike started a fire in the petroleum industrial zone, Reuters reported today citing two sources.

Fujairah exports about 1 million b/d of UAE’s Murban crude oil, the report added.

“Fujairah, linked to Abu Dhabi’s oilfields by pipeline and serving as a major trading point for crude and refined products, plays a crucial role in regional and global energy flows,” Hynes said.

Downward pressure:

The total number of rigs drilling for crude oil in the US rose by one to 412 units last week, according to Baker Hughes.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Nachiket Tekawade and Aparupa Mazumder

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