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, a shipping agent said.

If weather conditions improve by Sunday, operations could resume at bunkering Area 3, the agent 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, a shipping agent 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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