Europe & Africa Market Update 26 Nov

Benchmark bunker prices in European and African ports have declined sharply, and pilot strikes are causing congestion in Antwerp-Bruges.

IMAGE: Oil refinery and storage tanks in the Port of Rotterdam, Netherlands. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Gibraltar ($20/mt), Rotterdam ($17/mt) and Durban ($5/mt)
• LSMGO prices down in Gibraltar ($42/mt) and Rotterdam ($23/mt)
• HSFO prices down in Gibraltar ($8/mt), Rotterdam ($7/mt) and Durban ($6/mt)
• Rotterdam B30-VLSFO premium over VLSFO up by $14/mt to $270/mt
• Gibraltar B30-VLSFO premium over VLSFO up by $13/mt to $359/mt

Fuel prices at the three major ports have declined, tracking the fall in Brent.

Gibraltar's LSMGO price recorded the steepest fall over the past session. A lower-priced 500-1500 mt stem fixed at $428/mt may have put additional pressure on the benchmark.

This has also narrowed Gibraltar's LSMGO premium over Rotterdam by $19/mt.

VLSFO prices at Rotterdam and Gibraltar have also decreased more sharply compared to the port's HSFO prices, narrowing Hi5 spreads at the ports by $10-12/mt over the last day.

Prompt supplies remain difficult in the ARA hub, with buyers advised to enquire about stems with a lead time of around 5-7 days to get competitive offers from a wider selection of suppliers, a trader told ENGINE.

Meanwhile, shipping traffic in Antwerp remains partially disrupted due to pilot strikes, with around 28 outbound vessels and 35 inbound ships waiting for pilots in the area, according to shipping agent VertomCory Antwerp.

Traffic in Zeebrugge has resumed since morning, but congestion is seen with around 10 outbound and 8 inbound ships still waiting for pilots, VertomCory said.

Brent

The front-month ICE Brent contract has dropped by $0.35/bbl on the day, to trade at $62.48/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has gained some support after the American Petroleum Institute (API) reported a decline in US crude stocks.

Crude oil inventories in the US decreased by 1.9 million bbls in the week ending 21 November, according to the API estimates.

A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.

Downward pressure:

Brent crude has edged lower as momentum builds around advancing peace negotiations between Russia and Ukraine.

According to media reports, Ukraine has agreed to the preliminary terms of the revised US-brokered ceasefire proposal to end the conflict – which has continued for nearly four years now.

“Positive signals from both the US and Ukraine regarding a Russia-Ukraine peace deal continue to put pressure on energy markets,” two analysts from ING Bank said.

Oil market analysts now await comments from Moscow. “We are likely to get more colour on Russia’s stance in the coming days,” ING Bank’s analysts added.

By Nachiket Tekawade Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online