Europe & Africa Market Update 2 Dec

Bunker prices at major European and African ports have moved in mixed directions, while prompt supplies are tight off Skaw and at Gothenburg.

IMAGE: Aerial view of Port of Gothenburg. Gothenburg Port Authority

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($5/mt) and Rotterdam ($4/mt), and down in Durban ($16/mt)
• LSMGO prices unchanged in Rotterdam, and down in Gibraltar ($2/mt)
• HSFO prices up in Rotterdam ($9/mt), and down in Durban (6/mt) and Gibraltar ($1/mt)
• Gibraltar B30-VLSFO premium over VLSFO down by $7/mt to $351/mt

Durban’s VLSFO price has slumped more than the stumble that the port's HSFO price recorded. This has narrowed the Hi5 spread at the port by $10/mt, to $14/mt, over the past day.

Meanwhile, the price of LSMGO at Rotterdam has stayed unchanged over the past day, while the grade's price at Denmark's Off Skaw and Sweden's Gothenburg has slipped by $15/mt and $9/mt, respectively, narrowing their premiums over the Dutch port.

Fuel availability at both the Scandinavian locations remains tight for prompt supplies, with around 10 days of notice required, a trader told ENGINE.

Rough winds of above 30 knots are forecast to blow in these locations throughout the day and again on 8 December, which may complicate bunkering there and lead to delays or congestion.

Brent

The front-month ICE Brent contract has risen by $0.55/bbl on the day, to trade at $62.97/bbl at 09.00 GMT.

Upward pressure:

Risks from Ukrainian drone strikes on Russian energy facilities and escalating US–Venezuela tensions have contributed to upward pressure on Brent futures.

“Crude oil prices rose after a terminal in the Black Sea was damaged. One of three moorings on a pipeline linking Kazakh oil fields to Russia’s Black Sea coast was damaged by a Ukrainian attack,” said ANZ Bank senior commodity strategist Daniel Hynes.

A senior US official said President Donald Trump has been consulting his top advisers on the pressure campaign against Venezuela. On Saturday, Trump said the airspace above and surrounding Venezuela should be considered “closed in its entirety,” though he gave no further details, according to Reuters.

“The US is also widening its campaign against Venezuela, raising concerns that oil exports may be further impacted,” Hynes added.

On Sunday, OPEC+ reaffirmed a small production increase for December and paused further hikes in the first quarter of next year because of growing fears of a supply glut. The decision remains supportive for oil prices in the near term.

Downward pressure:

Mixed sentiment around US crude and product stock levels has put pressure on oil prices.

Market watchers are now looking ahead to the US Energy Information Administration’s weekly inventory report, due Wednesday.

By Nachiket Tekawade and Tuhin Roy

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