Europe & Africa Market Update 29 July
Bunker prices across Europe and Africa have mostly moved higher, while VLSFO supply off Malta is tight.
IMAGE: Tankers during a bunker operation off Malta. Getty Images
Changes on the day to 09.00 GMT today:
- VLSFO prices up in Durban ($27/mt), Gibraltar ($19/mt) and Rotterdam ($17/mt)
- LSMGO prices up in Durban ($57/mt), Gibraltar ($53/mt) and Rotterdam ($44/mt)
- HSFO prices up in Rotterdam ($17/mt) and Gibraltar ($11/mt), and down in Durban ($5/mt)
- B30-VLSFO prices up in Rotterdam ($38/mt) and Gibraltar ($24/mt)
Bunker fuel prices have mostly gained over the past session, tracking Brent's gain.
Conversely, Durban's HSFO price has dropped slightly, while the port's VLSFO price has increased. This has widened the port’s Hi5 spread by $32/mt in the past day.
Like at Durban, the HSFO price off Malta has also slipped $5/mt in the past day. On the other hand, the offshore anchorage's VLSFO price has increased $18/mt, thus widening its Hi5 spread by $23/mt to $234/mt in the past day.
Three 500-1,500 mt VLSFO stems were fixed off Malta at high prices between $770-783/mt over the past day, which may have supported the price increase of the benchmark.
VLSFO off Malta offers a $75/mt price premium over Gibraltar.
The LSMGO price off Malta has also surged $68/mt in the past day. Four LSMGO stems of between 50-150 mt were fixed in the location at high prices between $1,393-1,432/mt, which may have provided support.
VLSFO fuel availability is tight off Malta, with lead times of around seven days recommended, a trader said. ULSFO availability is also tight, while it is possible to get prompt deliveries of LSMGO, the trader added.
Brent
The front-month ICE Brent contract has gained by $1.57/bbl on the day, to trade at $87.10/bbl at 09.00 GMT.
Upward pressure:
Brent’s price has moved higher on the back of renewed military action in the Middle East.
Iranian military has launched ballistic missiles targeting US bases in the Middle East, while US and Saudi Arabian forces carried out strikes on Iran-linked logistics and weapons sites across eastern Iraq.
The renewed combat has shattered the brief truce that had fuelled hopes of some cooling in the market, analysts said.
“These [latest] developments throw cold water on the idea of a swift de-escalation in the Persian Gulf,” two analysts from ING Bank noted.
Adding further upward pressure on Brent, the American Petroleum Institute (API) reported a surprise draw of 3.3 million bbls in US crude stocks in the week ended 24 July, Reuters reported.
A decline in US crude stocks indicates tightness in the oil market and support Brent's price rise.
Downward pressure:
Talks of de-escalation in the Middle East have capped some of Brent crude’s price rally today. Yesterday, US President Donald Trump said Washington and Tehran had engaged in talks and that there was a “good chance” of a lasting deal.
Brent crude’s price felt some downward pressure as “traders positioned for potential progress towards peace talks in the Middle East conflict,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.
By Nachiket Tekawade and Aparupa Mazumder
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