Europe & Africa Market Update 20 Feb

Bunker fuel prices across European and African ports have shown mixed movements, and fuel supply remains stable off Malta amid strong weather.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($2/mt), unchanged in Rotterdam, and down in Durban ($10/mt)
• LSMGO prices up in Rotterdam ($10/mt), and down in Gibraltar ($6/mt)
• HSFO prices down in Durban ($11/mt), Rotterdam and Gibraltar ($2/mt)
• B30-VLSFO prices down in Gibraltar ($17/mt) and Rotterdam ($2/mt)

The VLSFO price off Malta has jumped by around $17/mt over the past day, increasing its premium over Gibraltar’s VLSFO price by around $15/mt in a single day.

Conversely, the HSFO price off Malta has fallen by $7/mt.

Consequently, the port’s Hi5 spread has widened by around $24/mt to $72/mt in a single day, significantly increasing the incentive for bunkering the cheaper-priced HSFO at the location.

Meanwhile, off Malta's LSMGO is currently priced around $60/mt higher than Gibraltar’s. This marks a sharp widening from last week, when prices at the two locations were almost at parity.

Strong winds exceeding 25 knots and waves of around 2 metres are expected to persist until Saturday. As of Friday morning, bunkering operations are being carried out in the sheltered Area 1 & Area 4, shipping agent WMR said.

If weather conditions improve by Sunday, operations could resume at bunkering Area 3, WMR added.

All fuel supplies are proceeding normally off Malta, a trader told ENGINE.

The bunkering facilities affected by the recent Storm Harry are currently partially operational and are expected to be fully functional within the next few weeks, WMR said.

Brent

The front-month ICE Brent contract has inched $0.10/bbl lower on the day, to trade at $71.44/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has found support after the US Energy Information Administration (EIA) reported a massive drop in crude stocks.

Commercial US crude oil inventories have decreased by 9 million bbls to 420 million bbls for the week ending 13 February, according to data from the EIA.

A drop in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

The EIA data provided support to Brent’s price “with a bullish release,” two analysts from ING Bank noted.

Meanwhile, recent comments from US President Donald Trump have put some upward pressure on Brent, according to market analysts.

Trump has set a deadline of 10-15 days for Iran to make a deal with Washington over its nuclear program, or "really bad things" will happen, Reuters reported.

“Any outbreak of fighting would jeopardise flows from a region that pumps about a third of the world’s supplies,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

There are no significant downward pressures on Brent’s price momentarily, however, market analysts remain cautious about further developments in the Iran-US nuclear talks.

Earlier this week, representatives from both nations met for negotiations in Geneva, Switzerland.

Washington said that Iran will submit a detailed proposal in the coming two weeks, according to another Reuters report.

By Nachiket Tekawade and Aparupa Mazumder

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