Europe & Africa Market Update 21 Oct

Bunker prices have dropped in Rotterdam, Gibraltar and Durban, while bunkering is suspended off Malta due to rough weather.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($41/mt), Rotterdam ($11/mt) and Gibraltar ($8/mt)
• LSMGO prices down in Durban ($69/mt), Gibraltar ($28/mt) and Rotterdam ($9/mt)
• HSFO prices down in Gibraltar ($18/mt), Durban ($17/mt) and Rotterdam ($10/mt)

Bunker prices have dropped over the past day, tracking the fall in Brent.

Rotterdam’s LSMGO has seen a more modest drop compared to Gibraltar. Two higher priced stems, fixed between $1,435-1,438/mt, have provided some support to the Dutch port's LSMGO benchmark and limited its drop.

Consequently, Gibraltar’s price premium over Rotterdam has narrowed $19/mt over the past day, to $106/mt.

Malta’s LSMGO price dropped $24/mt over the past day, and is now trading at a $14/mt price discount to Gibraltar. Meanwhile, Malta’s VLSFO price is almost at par with Gibraltar.

Demand is slow off Malta. Fuel availability is tight for prompt VLSFO, LSMGO and ULSFO supplies, with buyers advised lead times of 5-7 days, a trader said. HSFO is not available off Malta, the trader added.

Wind gusts of 25 knots and waves of around 1.5 meters are forecast in the port. Bunkering operations are currently suspended off Malta, port agent MH Bland said.

Brent

The front-month ICE Brent contract has dropped by $1.28/bbl on the day, to trade at $110.13/bbl at 09.00 GMT.

Upward pressure:

Iran’s President Masoud Pezeshkian, discussed with Pakistan’s army chief, mediation efforts to resolve the Middle East crisis in Tehran on Tuesday, but took a hard line, saying there would be no talks with Washington until its demands to reopen the Strait of Hormuz were met, according to media reports.

Brent continues to trade above $110/bbl as security risks persist for vessels passing through the strait. Ship-tracking firm Kpler reported on Monday that at least 18 vessels had been attacked in the region over the past two weeks.

“While Persian Gulf oil flows improved in the second week of October, the recovery looks under threat amid the increased attacks, with preliminary data pointing to another slowdown,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

US crude oil stocks dropped by 4.93 million bbls in the week ending 16 October, according to estimates from the American Petroleum Institute (API), as cited by Trading Economics. A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Downward pressure:

The International Energy Agency (IEA) is prepared to coordinate further releases of oil from emergency stocks with its member countries, Reuters reported, citing IEA executive director Fatih Birol.

The agency announced last week that its member countries had collectively released about 330 million bbls of crude oil and petroleum products from strategic reserves so far, amid the ongoing conflict in the Middle East.

By Nachiket Tekawade and Shilpa Sharma

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