Europe & Africa Market Update 7 Jan

Bunker prices across European and African ports have moved mostly lower, while rough weather is causing bunkering delays off Malta.

IMAGE: Tankers during a bunker operation off Malta. Getty Images

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Durban ($14/mt), Gibraltar ($13/mt) and Rotterdam ($9/mt)
• LSMGO prices down in Gibraltar ($26/mt) and Rotterdam ($16/mt)
• HSFO prices down in Durban ($17/mt), Gibraltar ($10/mt) and Rotterdam ($9/mt)
• Rotterdam B30-VLSFO premium over VLSFO down $34/mt to $287/mt
• Gibraltar B30-VLSFO premium over VLSFO down $6/mt to $342/mt

Bunker fuel prices have declined significantly in the three major ports, in line with the slide in Brent futures.

Gibraltar’s LSMGO price has fallen more steeply than Rotterdam's benchmark, narrowing Gibraltar’s premium over the Dutch port by $10/mt. A lower-priced 150-500 mt stem fixed at $655/mt has put additional downward pressure on the benchmark.

A lower-priced 150-500 mt LSMGO stem fixed at $640/mt for delivery off Malta has contributed to pushing the benchmark price down by $23/mt in a single day, to $628/mt.

The VLSFO price off Malta has also slumped by $23/mt to $411/mt. This has widened Malta’s discount to Gibraltar by $10/mt since yesterday.

While availability is normal off Malta, buyers are advised to book stems with a lead time of 4-5 days as rough weather conditions could delay bunkering operations in some bunkering areas, a trader said.

Westerly wind gusts of more than 25 knots and waves of over 3 meters are expected intermittently between 7-11 January. Currently suppliers are carrying out bunkering in Bunkering Area 1, the trader said.

Brent

The front-month ICE Brent contract has declined by $1.89/bbl on the day, to trade at $60.20/bbl at 09.00 GMT.

Upward pressure:

Brent’s price has felt some upward thrust after the American Petroleum Institute (API) reported a drop in US crude stocks.

US crude oil inventories decreased by 2.8 million bbls in the week ending 2 January, according to API estimates cited by Trading Economics.

A slump in US crude stocks usually signals good demand and can give some support to Brent’s price.

Downward pressure:

Brent crude’s price has plunged after the market quickly assessed the fallout from Venezuela’s political turmoil and the uncertainty surrounding control of its oil assets.

Yesterday, US President Donald Trump said Venezuela’s interim administration would be “turning over” 30-50 million bbls of sanctioned oil to be sold at market prices.

The development comes after last week’s detention of President Nicolas Maduro and his wife from the country’s capital city Caracas.

The end of Maduro presidency in Venezuela could add fresh barrels to an already oversupplied market, according to analysts.

By Nachiket Tekawade and Aparupa Mazumder

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