Europe & Africa Market Update 30 Jan

Fuel prices across European and African ports have mostly slipped, while congestion surges in Gibraltar.

IMAGE: Aerial view of Gibraltar Harbour with dark storm clouds in the background. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($1/mt), and down in Durban ($4/mt) and Gibraltar ($3/mt)
• LSMGO prices down in Rotterdam and Gibraltar ($6/mt)
• HSFO prices down in Rotterdam, Durban ($2/mt) and Gibraltar ($1/mt)
• B30-VLSFO prices unchanged in Rotterdam, and down in Gibraltar ($9/mt)

Algeciras’ LSMGO price has slumped by $21/mt over the past session. The price has dropped around $15/mt more steeply than in Gibraltar, and is currently around $16/mt cheaper than in Gibraltar, compared to yesterday, when it was almost at par.

The VLSFO price at the Spanish port has also fallen around $14/mt, and is now at an $8/mt discount to Gibraltar, compared to a $3/mt premium observed yesterday.

Congestion caused by weather disruptions is increasing in Gibraltar, with around 38 vessels currently queued up for bunkers, compared to 26 vessels yesterday, port agent MH Bland said.

Wind gusts of around 30 knots and waves of more than 2 metres are forecast in the port between 30 January - 1 February and again from 4-7 February.

No vessels are allowed into the anchorage at Gibraltar due to the rough weather forecast, while alongside operations can continue, according to MH Bland.

Port operations remain suspended in neighbouring Algeciras as well, the port agent said.

In Ceuta, anchorage operations remain suspended, while ex-pipe deliveries have resumed but are operating only subject to pilots’ approval, MH Bland added.

Consequently, delays are expected to pile up, and fuel buyers are requested to provide a lead time of around 8-10 days for delivery of any fuel grade in all three ports, a trader said.

Brent

The front-month ICE Brent contract has gained by $0.27/bbl on the day, to trade at $70.08/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has continued to draw some support as tensions build between the US and Iran amid US President Donald Trump's threats to attack the OPEC nation.

The oil market is becoming “increasingly nervous” over potential US strikes if Iran does not make a deal regarding its nuclear ambitions, two analysts from ING Bank noted.

Iran produces about 3.2 million b/d of crude oil, so any escalation could potentially disrupt supply from the Middle Eastern region, according to market analysts.

“Iran accounts for about 3% of global supply. It’s clear that the market is now pricing in a geopolitical risk premium amid the risks to supply disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price has come under downward pressure on some easing supply concerns.

Earlier this week, Kazakhstan’s pipeline operator Caspian Pipeline Consortium (CPC) said full loading operations have resumed at its Black Sea terminal, after maintenance was completed on one of three mooring points.

Loadings were previously suspended after the mooring points were damaged in a Ukrainian drone strike.

“With this repair work complete, loadings should normalise, helping to ease some of the tightness,” ING Bank analysts said.

By Nachiket Tekawade and Aparupa Mazumder

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