Europe & Africa Market Update 19 Mar

Bunker benchmark prices in European and African ports have surged, while fuel availability is tight in Las Palmas.

IMAGE: The commercial harbour in Las Palmas. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($130/mt), Gibraltar ($107/mt) and Rotterdam ($104/mt)
• LSMGO prices up in Rotterdam ($128/mt) and Gibraltar ($124/mt)
• HSFO prices up in Rotterdam and Gibraltar ($95/mt)
• B30-VLSFO prices up in Gibraltar ($137/mt) and Rotterdam ($93/mt)

Bunker benchmarks have gained significantly across European and African ports over the past session, tracking the jump in Brent.

LSMGO’s price in Las Palmas has surged by around $181/mt, more sharply than Gibraltar’s price. Consequently, Las Palmas’ LSMGO is now $70/mt costlier than in Gibraltar.

Meanwhile, Las Palmas’ VLSFO price discount to Gibraltar has almost doubled in the past session.

Fuel availability of both grades is tight at the Canary Islands bunkering hub, and buyers are advised to enquire about stems 10 days in advance for deliveries, a trader said.

HSFO deliveries are also very tight, and buyers are advised a notice of more than two weeks, the trader added.

Swells higher than 2.5 metres are forecast continuously in the area until Friday evening.

Bunkering operations at the outer anchorages have been cancelled due to the strong weather conditions, while deliveries can be carried out in the inner anchorage and at the berth but with additional waiting times, port agent MH Bland said.

Brent

The front-month ICE Brent contract has risen by $12.66/bbl on the day, to trade at $115.55/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has surged by more than $12/bbl after Iran targeted energy infrastructure across the Middle East in response to Israeli strikes on Iran’s South Pars gas field yesterday.

Key Gulf energy producers, including Saudi Arabia, Kuwait, Iraq and Qatar, continue to face Iranian strikes, with Saudi Aramco’s Samref refinery at the Red Sea port of Yanbu among the main targets in missile attacks earlier today.

“This raises fears of a more prolonged disruption to Persian Gulf energy supplies,” two analysts from ING Bank said.

With no signs of de-escalation, Brent is likely to rally this week, according to market analysts.

“The UAE’s daily oil output is down by 1.8mb/d [1.8 million b/d] since February. Kuwait’s oil production has dropped to about 1.3m b/d [1.3 million b/d] from 2.6mb/d [2.6 million b/d] last month,” ANZ Bank’s senior commodity strategist Daniel Hynes said, citing Bloomberg data.

Downward pressure:

Brent’s price has come under some downward pressure after the US Energy Information Administration (EIA) reported a sizeable build in US crude stocks.

Commercial US crude oil inventories increased by 6.2 million bbls to 449 million bbls in the week ending 13 March, according to data from the EIA.

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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