Europe & Africa Market Update 17 Feb

Bunker fuel prices across European and African ports have moved upwards, and prompt supplies of VLSFO and LSMGO are tight in the ARA.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($8/mt), Gibraltar ($5/mt) and Durban ($4/mt)
• LSMGO prices up in Rotterdam ($13/mt) and Gibraltar ($4/mt)
• HSFO prices up in Durban ($6/mt), Rotterdam ($5/mt) and Gibraltar ($3/mt)
• B30-VLSFO prices up in Rotterdam ($6/mt) and Gibraltar ($2/mt)

Bunker benchmark prices at all three major locations have recorded gains, tracking the rise in Brent.

LSMGO prices in Rotterdam, Antwerp and Amsterdam have all moved around $13-$15/mt higher over the previous session.

LSMGO in Antwerp is around $8/mt cheaper than in Rotterdam. Bunkering HSFO and VLSFO in Antwerp can offer around $10-$11/mt discounts to Rotterdam.

Hi5 spreads in Antwerp, Amsterdam and Rotterdam are all in the range of $47-$51/mt.

VLSFO and LSMGO supplies are tight for prompt dates in the ARA, with buyers recommended lead times of around 5-7 days, while HSFO supplies are available more readily with a notice of around 2-4 days, a trader told ENGINE.

Brent

The front-month ICE Brent contract has gained by $0.52/bbl on the day, to trade at $67.94/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt upward pressure as tensions continue to build around Iran-US talks.

Iran’s military forces have held drills in the Strait of Hormuz, ahead of the highly anticipated nuclear talks later today, Reuters reported, citing Iran’s semi-official news agency Tasnim.

Market analysts view the move as a sign of Tehran’s willingness to safeguard the vital shipping corridor widely used by global maritime operators, should the negotiations fail to produce a breakthrough.

Oil risk premium continues to build “following Iranian naval drills carried out just ahead of US nuclear talks,” two analysts from ING Bank noted.

Downward pressure:

Representatives from Washington and Tehran will hold a second round of indirect talks in Geneva later today.

If the talks yield a positive outcome, they could ultimately help alleviate supply concerns stemming from the Middle East. Notably, Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

The talks primarily aim to discuss Iran’s nuclear enrichment programme – something Washington has consistently opposed.

Separately, market analysts are eyeing discussions between Russia and Ukraine, that are supposed to resume today.

“The market remains unsettled amid ongoing geopolitical uncertainties, with investors staying cautious due to the pending US-Iran and Ukraine negotiations this week,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Nachiket Tekawade and Aparupa Mazumder

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