News 4th Mar, 2024

Europe & Africa Market Update 4 Mar 2024

Richards Bay

Regional bunker benchmarks have moved up with Brent, and congestion has increased in Gibraltar port.

PHOTO: A cruise ship at the Port of Gibraltar. Getty Images

Changes on the day, from Friday to 09.00 GMT today:

  • VLSFO prices up in Gibraltar ($15/mt), Rotterdam ($10/mt) and Durban ($4/mt)
  • LSMGO prices up in Gibraltar ($22/mt) and Rotterdam ($7/mt)
  • HSFO prices up in Rotterdam ($26/mt) and Gibraltar ($17/mt) 

Rotterdam’s HSFO price has shot up by $26/mt over the weekend, outpacing Gibraltar’s gains by $9/mt. The price moves have narrowed the port’s HSFO discount to Gibraltar from Friday's $64/mt to $55/mt now. The port's Hi5 spread has also narrowed significantly over the past week, from $120/mt to $96/mt because HSFO gains have been steeper compared to those of its VLSFO. Improved VLSFO supply in Rotterdam has helped to cap some of its price gains.

Several stems for prompt delivery were booked across Rotterdam, Gibraltar and Durban on Friday. Rotterdam’s LSMGO price has resisted the downward pull of a lower-priced LSMGO stem fixed on Friday and increased by $7/mt over the weekend. 

In Gibraltar, two higher-priced VLSFO and LSMGO stems for prompt delivery were booked on Friday, which have added upward price pressure on both benchmarks. Congestion has increased in Gibraltar, where 10 vessels are waiting for bunkers today, up from just two on Friday, a source says. Bad weather conditions over the weekend have largely resulted in the congestion build up.

In Durban, a higher-priced VLSFO stem booked on Friday has resulted in a moderate increase of $4/mt for the bunker grade. VLSFO supply has been tight at the port, with lead times of well over ten days recommended, according to a trader.


The front-month ICE Brent contract gained $1.60/bbl on the day from Friday, to trade at $83.78/bbl at 09.00 GMT.

Upward pressure:

Brent’s price got a boost after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced the extension of a voluntary output cut of 2.2 million b/d into the second quarter of this year.

OPEC’s de-facto leader Saudi Arabia announced a voluntary cut of 1 million b/d, followed by Iraq (220,000 b/d), the UAE (163,000 b/d), Kuwait (135,000 b/d), Kazakhstan (82,000 b/d), Algeria (51,000 b/d) and Oman (42,000 b/d) through the end of June.

Russia, the leading producer of OPEC+, will continue oil production and export cuts by an additional 471,000 b/d in the second quarter, its Deputy Prime Minister Alexander Novak said on Sunday.

This announcement will support Brent’s price gains as “signs of tightness in the physical market continue to push crude oil higher,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “Output cuts by the OPEC+ alliance continue to reduce supply as the market worries about the renewed tensions in the Middle East,” he added.

Meanwhile, in a clear escalation of the Middle Eastern conflict, Iran-backed Houthis vowed on Sunday that the group will continue targeting US- and UK-operated ships transiting the Gulf of Aden, following the sinking of UK-owned cargo vessel M/V RUBYMAR.

"Yemen will continue to sink more British ships, and any repercussions or other damages will be added to Britain's bill," Hussein al-Ezzi, a senior member of the Houthi group said in a post on X (formerly Twitter).

Downward pressure:

Meanwhile, mixed projections for world oil demand growth have put some downward pressure on Brent futures.

Last week, the US Energy Information Administration’s (EIA) weekly oil inventory report showed a big build in US crude stockpiles, indicating a lacklustre demand growth in the country.

Commercial crude oil inventories in the US surged by 4 million bbls to reach 447.16 million bbls on 23 February, according to the EIA.

By Manjula Nair and Aparupa Mazumder

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