Europe & Africa Market Update 5 Jan

Bunker prices across European and African ports have moved in mixed directions, while prompt supply remains tight in the ARA bunkering hub.

IMAGE: The Europoort area in the Port of Rotterdam. Getty Images

Changes on the day, from Friday, to 09.00 GMT today:

• VLSFO prices up in Rotterdam ($5/mt), and down in Gibraltar and Durban ($6/mt)
• LSMGO prices up in Gibraltar ($7/mt), and down in Rotterdam ($3/mt)
• HSFO prices up in Gibraltar ($3/mt), and down in Durban ($11/mt) and Rotterdam ($5/mt)
• Gibraltar B30-VLSFO premium over VLSFO up $10/mt to $365/mt

Rotterdam's VLSFO price is now at an $8/mt discount to Gibraltar, while its HSFO benchmark is at a $33/mt discount. Rotterdam's Hi5 spread stands at $62/mt, which is $25/mt wider than Gibraltar's.

LSMGO bunkers in Rotterdam cost $44/mt cheaper than in Gibraltar, compared to a $34/mt discount observed on Friday.

Prompt bunker supply remains tight in the ARA bunkering hub and buyers are advised to book 5-7-days in advance to get competitive offers from a wide selection of suppliers, a trader said.

Weather conditions have improved in the region after rough winds disrupted operations late last week. Pilot stations in Antwerp have resumed operations for all vessels, shipping agent VertomCory Antwerp said.

Brent

The front-month ICE Brent contract has dropped by $0.68/bbl on the day from Friday, to trade at $60.04/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has gained upward support following a major geopolitical escalation in Venezuela.

Over the weekend, US troops carried out an operation that resulted in the detention of Venezuelan President Nicolas Maduro and his wife, from the country’s capital Caracas.

Moreover, US President Donald Trump said Washington would take control of the OPEC member nation and confirmed that the US embargo on Venezuelan oil would remain in place.

Venezuela controls almost 17% of global oil reserves, or 303 billion bbls, according to Reuters. The future of its oil output now depends on how US sanctions policy develops, market analysts said.

“Any rehabilitation of Venezuela’s oil sector could take years and billions of dollars in capital,” SPI Asset Management managing partner Stephen Innes said.

Downward pressure:

The total number of rigs drilling for crude oil in the US rose by three to 412 units last week, according to Baker Hughes.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

In an oversupplied market, any signal of increased future supply can put downward pressure on Brent’s price.

By Nachiket Tekawade and Aparupa Mazumder

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