Europe & Africa Market Update 24 June

Bunker prices across major European and African ports have declined, while LSMGO is available more promptly than VLSFO off Malta.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Rotterdam ($11/mt), Gibraltar ($4/mt) and Durban ($1/mt)
• LSMGO prices down in Rotterdam ($16/mt) and Gibraltar ($14/mt)
• HSFO prices down in Gibraltar ($14/mt) and Rotterdam ($6/mt)
• B30-VLSFO prices down in Gibraltar ($100/mt) and Rotterdam ($21/mt)

LSMGO prices in Rotterdam and Gibraltar have both declined between $14-16/mt over the past session.

The price of LSMGO off Malta has declined $25/mt in the last day. A 150-500 mt stem, fixed at a low price of $945/mt, has put additional downward pressure on the benchmark.

Its price discount to Gibraltar has widened around $11/mt due to the decline in prices.

LSMGO availability is stable off Malta, a trader said. VLSFO availability is tighter with earliest deliveries available around five days out and HSFO is out of stock with most suppliers, the trader added.  

Brent

The front-month ICE Brent contract has declined by $1.66/bbl on the day, to trade at $75.70/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported another decline in crude stocks.

US crude oil inventories recorded a decline of 765,000 bbls in the week ending 19 June, according to the API.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

Meanwhile, Strategic Petroleum Reserve (SPR) inventories have declined by another 9.1 million bbls to 331.2 million bbls in the previous week, “the lowest level in more than four decades and nearly 394 million barrels below maximum capacity,” according to Trading Economics.

Downward pressure:

Oil has come under further downward pressure as vessel traffic through the region’s most important chokepoint seem to gradually recover.

US President Donald Trump claimed yesterday that 19 million bbls of oil flowed out of the Strait on Monday.

“Oil prices continue to move lower as flows from the Persian Gulf start to recover,” two analysts from ING Bank noted.

Since the onset of the US-Iran conflict, the Strait of Hormuz has remained largely closed to commercial traffic, first due to Iran’s de facto closure, and subsequently by a US blockade.

“Price action suggests the market is assuming a rapid recovery in traffic through the Strait of Hormuz,” the analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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