Europe & Africa Market Update 18 Aug

Bunker prices in European and African ports have mostly increased, while fuel availability is tight for prompt supplies in the ARA ports.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($8/mt) and Gibraltar ($2/mt), and down in Durban ($7/mt)
• LSMGO prices up in Rotterdam ($31/mt) and Durban ($14/mt), and down in Gibraltar ($10/mt)
• HSFO prices up in Rotterdam ($17/mt), Gibraltar ($9/mt) and Durban ($4/mt)
• B30-VLSFO prices up in Rotterdam ($1/mt)

Bunker fuel prices have mostly gained over the past day, tracking the rise in Brent.

Rotterdam’s LSMGO price has seen a sharp increase over the past day. Two higher priced stems of 150-500 mt, fixed between $1,264-1,300/mt, may have provided supported to the Dutch port’s LSMGO benchmark.

Conversely, Gibraltar’s LSMGO price has slipped, weighed down by a lower priced 150-500 mt stem, fixed at $1,312/mt.

Consequently, Rotterdam’s price discount to Gibraltar has narrowed by $41/mt, to $67/mt.

Fuel availability is tight for prompt delivery dates in the ARA hub ports, with buyers recommended a lead time of 5-7 days to get competitive offers from a wide selection of suppliers, a trader told ENGINE.

Brent

The front-month ICE Brent contract has gained by $1.71/bbl on the day, to trade at $90.92/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has moved higher, following the expiration of the 60-day US-Iran peace accord signed on 17 June.

“Talks appear to be at a standstill, as the 60-day truce expired on Monday,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Washington has decided to not extend the ceasefire, while Tehran is prepared to launch a “full offensive” policy against the US, as negotiations failed to reach a positive outcome.

“Oil prices remained supported by rising geopolitical risks and supply concerns,” two analysts from ING Bank noted.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts will keep an eye out for US crude stocks data that will be out later this week.

Last week, the US Energy Information Administration (EIA) reported a massive 17.4 million bbls build in commercial US crude oil inventories, in the week ending 7 August.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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