Europe & Africa Market Update 26 Oct

Bunker prices in European and African ports have moved in mixed directions since Friday, and prompt fuel availability is tight at ports in the Gibraltar Strait.

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

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices down in Durban ($15/mt), Rotterdam ($12/mt) and Gibraltar ($4/mt)
• LSMGO prices down in Rotterdam ($22/mt), Durban ($10/mt) and Gibraltar ($3/mt)
• HSFO prices up in Durban ($21/mt), Rotterdam ($6/mt) and Gibraltar ($1/mt)

Rotterdam’s LSMGO price has dropped more sharply than Gibraltar’s over the weekend. This has widened Gibraltar’s LSMGO price premium by $19/mt to $118/mt.

Gibraltar’s Hi5 spread has widened to $55/mt today, up from 11 October's spread at $0/mt.

This period saw VLSFO offered at the Mediterranean port rise $71/mt, from $723/mt to $794/mt, while the port's HSFO rose only $16/mt, from $723/mt to $739/mt. The VLSFO offered rose about four times as much as HSFO, thus widening the spread.

Fuel availability is tight for prompt supplies in the Gibraltar Strait, with buyers advised booking stems around 7-10 days ahead to secure coverage, a trader said.

In Algeciras, some suppliers are running around 24-32 hours behind schedule on deliveries, port agent MH Bland said.

Brent:

The front-month ICE Brent contract has risen by $0.75/bbl on the day from Friday, to trade at $114.48/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has extended gains as mounting concerns over supply disruptions in the Middle East have kept the market on edge.

Market participants are growing increasingly concerned about the risk of a fresh escalation in tensions between the US and Iran as Washington prepares for the mid-term elections on 3 November.

“Reports suggest President Trump is considering fresh strikes on Iran, while the US is reinforcing its military presence in the region with the deployment of a second aircraft carrier,” two analysts from ING Bank noted.

Saudi Arabia’s state-owned oil company Aramco has urged its staff to evacuate its headquarters in Dhahran, as the conflict between Riyadh and Yemen-based Houthi militant group intensified last week.

Downward pressure:

Brent’s gains have been capped by some hopes of easing hostilities in the Middle East.

Qatari mediators travelled to Tehran yesterday in an effort to de-escalate tensions between the US and Iran, Reuters reported, citing an official briefed on the situation.

Senior officials from Saudi Arabia, Turkey and Pakistan are also set to meet leaders in Tehran today, according to Reuters.

By Nachiket Tekawade and Aparupa Mazumder

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