Europe & Africa Market Update 28 May

Bunker prices across European and African ports have moved in mixed directions, and bunker availability remains stable in Hamburg.

IMAGE: Gantry cranes at the Port of Hamburg. Hamburg Port Authority

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Gibraltar ($19/mt), unchanged in Rotterdam, and down in Durban ($36/mt)
• LSMGO prices up in Gibraltar and Durban ($2/mt), and down in Rotterdam ($25/mt)
• HSFO prices down in Rotterdam ($28/mt) and Gibraltar ($2/mt)
• B30-VLSFO up in Rotterdam ($26/mt)

Rotterdam’s discount to Gibraltar’s LSMGO price has increased by around $27/mt, after the Dutch port's LSMGO price fell sharply over the past session.

Two lower-priced LSMGO stems of around 50-150 mt and 150-500 mt, respectively, fixed between $1,041-1,044/mt, have put downward pressure on the benchmark.

In Germany’s Hamburg, the price of LSMGO recorded a sharper decline, at $57/mt. A 150-500 mt LSMGO stem, fixed at a low price of $1,072/mt, has weighed on the benchmark.

Hamburg’s LSMGO price premium over Rotterdam has narrowed by around $32/mt to $20/mt in the last day.

Even as prompt availability has tightened in the ARA region, bunker availability in Hamburg remains stable, a trader said. Buyers are being advised a lead time of around five days to get deliveries of any fuel grade.

Brent

The front-month ICE Brent contract has inched up by $0.14/bbl on the day, to trade at $96.41/bbl at 09.00 GMT.

Upward pressure:

Oil prices moved higher after the US military launched fresh strikes in Iran, targeting a military site that officials believed posed a threat to US forces and commercial maritime traffic in the Strait of Hormuz, according to Reuters citing a US official.

“Crude ticks higher as US strikes Iran again,” remarked VANDA Insights founder Vandana Hari.

Iran's Revolutionary Guards said they had targeted a US airbase in response to a US attack in the port city of Bandar Abbas, Reuters reported.

The latest flare-up in the Middle East has added further upward pressure on Brent futures.

Meanwhile, US crude oil inventories fell by 2.8 million bbls in the week ending 22 May, according to estimates from the American Petroleum Institute (API) cited by Trading Economics.

A draw in US crude stocks could signal stronger oil demand and lend additional support to Brent prices.

Downward pressure:

Market focus shifted from concerns over escalating Middle East hostilities to optimism surrounding a potential US-Iran peace deal, putting some downward pressure on oil prices.

“Crude oil prices sold off, as markets became increasingly convinced that a US-Iran deal was imminent,” said ANZ Bank senior commodity strategist Daniel Hynes.

By Nachiket Tekawade and Tuhin Roy

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