Europe & Africa Market Update 19 Aug

Bunker prices in European and African ports have mostly increased, while VLSFO and ULSFO availability is tight for prompt supplies off Malta.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($1/mt), and down in Gibraltar ($9/mt) and Durban ($6/mt)
• LSMGO prices up in Gibraltar ($21/mt), Rotterdam ($12/mt) and Durban ($8/mt)
• HSFO prices up in Rotterdam ($26/mt), Durban ($4/mt) and Gibraltar ($1/mt)
• B30-VLSFO prices up in Gibraltar ($5/mt) and Rotterdam ($2/mt)

Gibraltar's LSMGO price has increased significantly over the past session.

Comparatively, the LSMGO price off Malta has remained mostly unchanged, having inched just $1/mt lower in the same period. A lower-priced stem of 50-150 mt, fixed at the offshore anchorage at $1,409/mt, has put downward pressure on the benchmark.

Consequently, off Malta’s LSMGO price premium over Gibraltar has narrowed $22/mt, to $45/mt.

VLSFO and ULSFO prices at the offshore location have also dropped $12/mt and $20/mt respectively.

Fuel availability for VLSFO and ULSFO is tight for prompt supplies, with buyers recommended lead times of around 5-7 days for both grades, a trader said. LSMGO is available more readily, the trader added.

Brent

The front-month ICE Brent contract has gained by $0.98/bbl on the day, to trade at $91.90/bbl at 09.00 GMT.

Upward pressure:

Brent crude has moved higher for a fourth consecutive session, as ongoing uncertainty surrounding the US-Iran standoff continues to put upward pressure on prices.

US President Donald Trump has signalled that talks with Iran have ended and that additional sanctions on Tehran could be announced later this week.

The potential implications of this move for shipping through the Strait of Hormuz could be adverse, according to market analysts.

“Oil prices extended gains… as uncertainty over a resolution to the US-Iran conflict continued to support risk premiums,” two analysts from ING Bank noted.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts continue to closely monitor the situation in the Middle East.

The 60-day peace accord that Trump signed on 17 June effectively ended earlier this week. However, Iran said the agreement is not dead but in a “coma”, its state-owned news agency IRNA reported.

Tehran’s comments suggest it could come back to the negotiation table if Washington agrees to its demands.

By Nachiket Tekawade and Aparupa Mazumder

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