Europe & Africa Market Update 7 May

Conventional fuel prices across European and African ports have moved in mixed directions, and fuel availability is stable in the 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 Gibraltar ($13/mt), and down in Durban ($13/mt) and Rotterdam ($12/mt)
• LSMGO price up in Durban ($48/mt), and down in Rotterdam ($104/mt) and Gibraltar ($33/mt)
• HSFO prices up in Rotterdam ($2/mt), and down in Durban ($62/mt) and Gibraltar ($3/mt)
• B30-VLSFO prices up in Rotterdam ($1/mt), and unchanged in Gibraltar

The price of LSMGO in Rotterdam has slumped more steeply than in Gibraltar.

Two lower-priced LSMGO stems of 150-500 mt each, fixed in the range of $1,112-1,125/mt, have exerted downward pressure on the Dutch port's price assessment.

This has widened its price discount to Gibraltar’s LSMGO by around $71/mt in the past day.

The Dutch port's VLSFO price decline, along with a tick-up in its HSFO price, has widened its Hi5 spread by $13/mt to $121/mt.

Fuel availability is stable in the ARA bunkering hub, a trader said. Around five days of notice is recommended for delivery of any fuel grade, the trader added.

Brent

The front-month ICE Brent contract has declined by $4.11/bbl on the day, to trade at $99.18/bbl at 09.00 GMT.

Upward pressure:

Brent futures gained some support after the US Energy Information Administration (EIA) reported a decline in US crude stocks.

Commercial US crude oil inventories decreased by 2.3 million bbls to 457.2 million bbls in the week ending 1 May, according to data from the EIA.

“The modest draw [reported by the EIA] reflected a sharp fall in exports,” two analysts from ING Bank noted.

Yesterday, the American Petroleum Institute (API) also reported a sizeable decline of 8.1 million bbls in US crude stocks.

A decline in US crude stocks typically indicates improvement in demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price has plunged on renewed hopes of a ceasefire deal between Washington and Tehran.

Iran is considering a new US proposal to end the conflict in the Middle East, the BBC reported.

“Energy markets sold off sharply… on de-escalation hopes in the Middle East,” ING Bank’s analysts said.

The news has raised hopes that oil flows through the Strait of Hormuz can gradually resume, according to market analysts.

The US proposal is “understood to include a one-page memorandum that would, if accepted by Iran, lead to a gradual reopening of Hormuz and the lifting of US restrictions on access to Iranian ports,” ING Bank’s analysts added.

By Nachiket Tekawade and Aparupa Mazumder

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