Europe & Africa Market Update 5 Mar

Prices of conventional fuel grades have increased across European and African ports, while ARA is seeing high bunkering premiums.

IMAGE: View of the entrance to the Port of Rotterdam, Netherlands. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($49/mt), Rotterdam ($17/mt) and Gibraltar ($2/mt)
• LSMGO prices up in Rotterdam ($114/mt) and Gibraltar ($15/mt)
• HSFO prices up in Rotterdam ($38/mt), Durban ($30/mt) and Gibraltar ($15/mt)
• B30-VLSFO prices down in Rotterdam and Gibraltar ($2/mt)

Conventional bunker prices at major European and African ports have gained in the past day, tracking the rise in Brent.

Heavy premiums are being levied on supplies in the ARA hub due to market volatility caused by the conflict in the Middle East.

The LSMGO price in Rotterdam has surged over the last day because a higher-priced stem, fixed at $998/mt, provided an additional upward push.

In nearby Antwerp, the price of LSMGO has jumped around $60/mt.

Consequently, Rotterdam’s LSMGO is now at a $9/mt premium over Antwerp's, compared to a $45/mt discount seen yesterday.

Deliveries in the ARA hub can take anywhere between 5-15 days, traders said.

Brent

The front-month ICE Brent contract has lost by $0.35/bbl on the day, to trade at $83.51/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has held steady on the back of a full-blown conflict between US-Israel and Iran.

Iran’s Islamic Revolutionary Guard Corps (IRGC) has completely sealed the Strait of Hormuz, according to media reports.

The news comes as continued airstrikes in the region have significantly escalated maritime security threats.

“Concerns are centred on the flow of supply through the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

About 20% of global oil supply transits the vital waterway, according to analysts.

“With producers unable to export their oil they are having to stockpile stranded supplies in storage tanks,” Hynes added.

Downward pressure:

Brent’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a rise in US crude stocks.

Commercial US crude oil inventories have increased by 3.5 million bbls to 439 million bbls for the week ending 27 February, according to data from the EIA.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

By Nachiket Tekawade and Aparupa Mazumder

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