Engine: Europe & Africa market update 4 Oct 2024
Bunker benchmarks in European and African ports have tracked Brent’s upward movement, and Rotterdam’s Hi5 spread has narrowed further, Engine reported. Changes on the day to 09.00 GMT today:
VLSFO prices up in Gibraltar ($24/mt), Rotterdam ($19/mt) and Durban ($18/mt)
LSMGO prices up in Gibraltar ($37/mt), Rotterdam ($31/mt) and Durban ($12/mt)
HSFO prices up in Rotterdam ($49/mt) and Gibraltar ($35/mt)
Rotterdam’s HSFO price has increased by a steep $49/mt in the past day. A higher-priced prompt HSFO stem fixed at $495/mt for 150-500 mt in the past day has spurred the upward movement in the benchmark. As a result, Rotterdam’s HSFO discount to Gibraltar's has narrowed by $14/mt to $22/mt now.
All grades are tight in Rotterdam, but prompt HSFO supply is most constrained amid bunker barge loading delays at terminals, a trader told ENGINE. The port’s Hi5 spread has also narrowed sharply from $63/mt yesterday to $33/mt now.
In contrast, bunker fuel availability is good for prompt delivery in Gibraltar. But bunkering may be hampered in Gibraltar today due to wind gusts of up to 20 knots forecast in the port area. Three vessels are waiting for bunkers in Gibraltar today, a source said.
Availability of VLSFO and LSMGO is good in the Greek port of Piraeus, the trader said. Suppliers are able to offer prompt delivery dates for the two grades in the port. Prompt HSFO supply is subject to enquiry there, the trader added. Calm weather is forecast in Piraeus today and over the weekend, making it conducive to bunker there, a source said.
Brent
The front-month ICE Brent contract has moved $3.88/bbl higher on the day, to trade at $78.44/bbl at 09.00 GMT.
Upward pressure:
Oil rallied as tensions continued to escalate in the Middle East. The conflict has now dragged in OPEC’s second-largest oil producer, Iran.
Brent’s price surged following reports that Israel’s next target could be Tehran’s oil and energy facilities, market analysts said.
“Oil prices skyrocketed… as investors scrambled for cover amid the brewing chaos in the Middle East,” SPI Asset Management’s managing partner Stephen Innes said.
The Pentagon and the Israel Defense Forces (IDF) are “discussing” possible airstrikes on Iranian oil infrastructure in response to Tehran’s missile attack earlier this week, US President Joe Biden said.
In a clip shared by Reuters, when asked if Washington would back an Israeli attack on Iran’s oil facilities, Biden responded, “We are discussing that.”
“Brent crude rose… on the news [that Israel could strike Iranian oil sites] as markets start to price in the likelihood of supply disruptions in the Middle East,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
“The region accounts for about a third of global supply,” Hynes added.
Downward pressure:
Brent’s price felt some downward pressure as Libya’s state-owned oil company National Oil Corporation (NOC), which oversees most of the country's oil resources, officially lifted force majeure on oil production and exports yesterday.
Crude oil production in the Sharara and El-feel oilfields, two of the largest Libyan oil production sites, and exports from Essider have resumed, NOC said in a statement.
The news comes as OPEC+ plans to proceed with production hikes in December, a move that will push the global oil market into over-supplied territory, according to market analysts.
Libya has a production capacity of about 1.2 million b/d, according to OPEC.
