Europe & Africa Market Update 28 Aug

European and African bunker fuel prices have moved higher in the past day, while ULSFO availability is tighter off Malta compared to VLSFO and LSMGO.

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($23/mt), Gibraltar ($20/mt) and Rotterdam ($16/mt)
• LSMGO prices up in Gibraltar ($38/mt), Durban ($35/mt) and Rotterdam ($28/mt)
• HSFO prices up in Durban ($47/mt) and Rotterdam ($3/mt), and down in Gibraltar ($3/mt)
• B30-VLSFO prices up in Rotterdam ($40/mt) and unchanged in Gibraltar

VLSFO and LSMGO bunker prices off Malta have mostly moved up in line with the Brent price,

Malta’s LSMGO price is at a premium of $28/mt over Gibraltar, while its VLSFO price is at a $31/mt price premium over Gibraltar.

The price premiums have seen a sharp decrease over the past one month. Malta's LSMGO premium over Gibraltar has narrowed by $103/mt since 28 July, while its VLSFO premium has dropped by $58/mt during the same period.

The ULSFO price off Malta has gone up $35/mt in the last day. This puts it at a $31/mt price premium over ULSFO offered in Spain’s Algeciras.

ULSFO availability is tighter off Malta compared to other fuel grades, with buyers advised 6-7 days of lead time to secure supplies of the fuel grade, a trader told ENGINE.

LSMGO and VLSFO availability is normal, with 1-3 days of notice needed for LSMGO, and 3-4 for VLSFO, the trader added.

Brent

The front-month ICE Brent contract has gained by $1.91/bbl on the day, to trade at $89.54/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has risen after Tehran blacklisted 45 vessels and threatened to impose hefty penalties on those that violate its regulations for transiting the Strait of Hormuz.

The announcement comes after Washington vowed sweeping economic sanctions against Tehran, in a bid to drive the OPEC producer’s oil and petroleum product export revenues to zero.

The US announced nearly 60 Iran-related sanctions and threatened of secondary sanctions on the Islamic Republic’s international allies – like China. 

“Oil prices edged higher as prospects for renewed US-Iran talks diminished,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price has felt some downward pressure following a surprise build in US crude stocks.

Commercial US crude oil inventories increased by 95,000 bbls to 429 million bbls in the week ending 21 August, according to data from the US Energy Information Administration (EIA).

The data followed a bigger build of 4.2 million bbls, reported by the American Petroleum Institute (API) during the same week.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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