Europe & Africa Market Update 8 Jan

Bunker prices across European and African ports have mostly moved lower, while VLSFO supplies can need longer lead times in Rotterdam.

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

Changes on the day to 09.00 GMT today:

• VLSFO prices down in Gibraltar ($3/mt), Rotterdam ($2/mt) and Durban ($1/mt)
• LSMGO prices down in Gibraltar ($8/mt) and Rotterdam ($2/mt)
• HSFO prices up in Rotterdam ($2/mt), and down in Gibraltar ($14/mt) and Durban ($9/mt)
• Rotterdam B30-VLSFO premium over VLSFO down $1/mt to $286/mt
• Gibraltar B30-VLSFO premium over VLSFO up $20/mt to $362/mt

Bunker fuel prices have mostly fallen in the past day, in line with the fall in Brent.

Gibraltar’s HSFO fuel price has seen the steepest fall among the three ports.

A lower-priced 500-1,500 mt HSFO stem fixed in Gibraltar at $370/mt has put additional downward pressure on the price.

Conversely, Rotterdam’s HSFO fuel price has inched higher against the general market direction. This has narrowed Rotterdam’s price discount to Gibraltar by $16/mt in a single day.

The Hi5 spread in the Dutch port is now at $47/mt.

VLSFO availability in the ARA bunkering hub is tight for prompt supplies, with buyers recommended to book stems with a lead time of eight days to get good coverage from suppliers, a trader said. LSMGO and HSFO availability is now normal, with supplies available promptly with a notice of 2-4 days, the trader added.

This compares with last week, when most fuel grades required lead times of around 5-7 days.

Rough winds of more than 30 knots and waves over 2.5 metres are forecast in the area on 9 January, which could cause some disruptions in bunkering.

Brent

The front-month ICE Brent contract has dipped $0.10/bbl lower on the day, to trade at $60.10/bbl at 09.00 GMT.

Upward pressure:

Brent's price has gained some upward momentum after the US Energy Information Administration (EIA) reported a big draw in US crude inventories.

US crude stocks fell by 3.8 million bbls in the week ending 2 January, according to the EIA weekly oil inventory report.

A drawdown in crude inventories is typically interpreted as a sign of healthy demand, lending support to Brent futures.

Downward pressure:

Reports that the US is tightening its grip on Venezuela’s oil exports have reinforced expectations of increased supply. The US seized two oil tankers linked to Venezuela in the Atlantic Ocean on Wednesday, including one sailing under the Russian flag, as part of President Donald Trump’s forceful effort to control oil movements across the Americas and pressure Venezuela’s socialist government into alignment, Reuters reported.

The development has continued to weigh on Brent futures.

“Developments around Venezuela continue to grab headlines, putting further pressure on oil prices,” two analysts from ING Bank said.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” they added.

By Nachiket Tekawade and Tuhin Roy

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