Europe & Africa Market Update 7 Apr

Fuel prices in Europe and Africa have mostly gained in the last day, and lead times of around five days is advised in ARA.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Durban ($24/mt) and Rotterdam ($12/mt), and down in Gibraltar ($9/mt)
• LSMGO prices up in Gibraltar ($48/mt) and Rotterdam ($30/mt)
• HSFO prices up in Gibraltar ($17/mt), Rotterdam ($12/mt) and Durban ($7/mt)

Bunker benchmark prices have mostly increased over the past day, tracking the gain in Brent price.

Defying the general market trend, the price of VLSFO at Gibraltar has fallen. This has decreased Rotterdam’s discount to Gibraltar by around $21/mt in a single day.

The Hi5 spread in Gibraltar has narrowed by around $26/mt and is now almost similar to Rotterdam’s Hi5 spread.

Bunkering LSMGO in Rotterdam comes at a $222/mt discount to Gibraltar.

Fuel availability is stable in the ARA, with buyers advised to book any stem with lead times of around five days, a trader said.

Brent

The front-month ICE Brent contract has gained by $1.47/bbl on the day, to trade at $109.36/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has moved higher after US President Donald Trump set a new deadline for Iran to strike a deal and reopen the Strait of Hormuz.

“Oil prices rose after US President Donald Trump signalled that an escalation of strikes on Iran could come as soon as Tuesday,” two analysts from ING Bank noted.

Trump warned in a social media post that US forces will target power plants and bridges after 20:00 ET (00:00 GMT midnight) today if Washington’s demands are not met.

Oil prices gained, “renewing fears that oil flows through the Strait of Hormuz could remain constrained for longer,” ING Bank’s analysts added.

Downward pressure:

Brent’s price has felt some downward pull after eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) collectively agreed to increase oil output by 206,000 b/d in May.

The output hike decision comes amid the escalating US-Israeli conflict with Iran that has triggered repeated strikes on energy infrastructure across the Middle East and effectively choked off traffic through the Strait of Hormuz.

“OPEC+ raised output targets by 206k b/d [206,000 b/d] in May, a largely symbolic move as the war continues to constrain output and shipments from several key members,” ING Bank’s analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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