Europe & Africa Market Update 21 Apr

Bunker benchmarks at European and African ports have fallen, while prompt availability is tight off Malta.

IMAGE: Aerial view of the Bay of Gibraltar. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($29/mt), Rotterdam ($7/mt) and Gibraltar ($6/mt)
• LSMGO prices down in Rotterdam ($60/mt) and Gibraltar ($11/mt)
• HSFO prices up in Gibraltar ($7/mt) and Rotterdam ($5/mt)
• B30-VLSFO price down in Rotterdam ($60/mt) and Gibraltar ($34/mt)

Most regional bunker benchmarks have slipped over the past day, tracking the drop in Brent.

However, HSFO has recorded gains in Rotterdam and Gibraltar, while VLSFO prices at these ports have fallen. This has widened the Hi5 spreads in both ports by around $12-13/mt over the past session.

Rotterdam’s LSMGO price has fallen more sharply than Gibraltar's. Consequently, Gibraltar’s price premium over Rotterdam has widened by around $49/mt in a single session.

LSMGO’s price off Malta has slumped by $106/mt in the last day. A lower-priced 150-500 mt stem, fixed at $1,259/mt, has put downward pressure on the price benchmark. Now, bunkering LSMGO off Malta costs around the same as in Gibraltar, compared to a $100/mt premium observed yesterday.

Fuel availability off Malta is tight this week, with suppliers giving earliest delivery dates not before 28 April, a trader said. Loading delays are affecting bunker availability, the trader added.

Brent

The front-month ICE Brent contract has inched $0.13/bbl lower on the day, to trade at $95.07/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has continued to trade above $95/bbl on the back of persistent tensions in the Middle East.

The US-Israel conflict with Iran is creating the ​“worst energy crisis ever faced by the ‌world,” according to Fatih Birol, the executive director of the International Energy Agency (IEA).

"This is indeed the biggest crisis ​in history," Reuters quoted Birol as saying in a radio interview.

Yemen-based Houthi militants have threatened to close the Bab al-Mandab Strait on the Red Sea, if hostilities between the US and Iran continue.

The Bab al-Mandab Strait is another key route to ship Middle Eastern oil to global markets. Blocking the region will cut off alternative options for Saudi Arabia’s oil shipments, according to market analysts.

“The oil market right now feels like a stage where the props are on fire, the script says panic,” remarked SPI Asset Management managing partner Stephen Innes.

Downward pressure:

Hopes of a de-escalation in the Middle East has capped Brent’s price gains today, with markets still factoring in the possibility of further negotiations.

A fresh round of talks between the Washington and Tehran is planned for Wednesday in Islamabad, the BBC reported.

“The US is sending negotiators to Pakistan for peace talks today. Iran, however, has said it doesn’t plan to take part in talks,” two analysts from ING Bank said.

By Nachiket Tekawade and Aparupa Mazumder

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