News 22nd May, 2024

Europe & Africa Market Update 22 May 2024

Richards Bay

Bunker benchmarks in European and African ports have declined with Brent, and bunker fuel availability is good in the Turkish port of Istanbul. 

PHOTO: Cargo being loaded on a container ship in Istanbul. Getty Images

Changes on the day to 09.00 GMT today:

  • VLSFO prices down in Durban ($8/mt), Gibraltar ($5/mt) and Rotterdam ($2/mt) 
  • LSMGO prices down in Durban ($11/mt), Rotterdam ($7/mt), and Gibraltar ($5/mt)  
  • HSFO prices down in Gibraltar (7/mt) and Rotterdam ($1/mt)

Rotterdam’s LSMGO price has come down in the past day. A lower-priced LSMGO stem booked for non-prompt delivery in the port has pulled the benchmark lower in the past day. Availability of the grade is normal in Rotterdam and in the wider ARA hub, with lead times of 3-5 days recommended by traders.

Availability is also normal for all bunker fuel grades in Gibraltar, with suppliers able to offer prompt deliveries there. Lead times of 2-4 days are recommended for all grades in the port, according to a trader. Calm weather is forecast in Gibraltar this week, conducive for bunkering in the area. Seven vessels are waiting for bunkers in Gibraltar today, down from eight yesterday, a source said. 

In the Turkish port of Istanbul, a higher-priced VLSFO stem was booked for $650/mt in the past day for prompt delivery, raising the benchmark by $4/mt to $644/mt now. The price movement has widened Istanbul’s VLSFO premium over Gibraltar by $9/mt to $44/mt now. Bunker fuel availability is good in Istanbul, a trader says, with lead times of 3-4 days advised for all grades.


The front-month ICE Brent contract lost $1.02/bbl on the day, to trade at $82.04/bbl at 09.00 GMT.

Upward pressure:

Oil prices gained support following the news about the Iranian President’s death in a helicopter crash on Sunday. The news raised concerns about political stability in the oil rich country.

“In Iran, Supreme Leader Ayatollah Ali Khamenei named first Vice President Mohammad Mokhber as interim president following the death of President Ebrahim Raisi,” VANDA Insights’ founder and analyst Vandana Hari said.

Ukraine’s targeted drone attacks on two Russian energy facilities have prompted state-owned company Rosneft to shut operations at its Tuapse refinery in Krasnodar region over the weekend, the country’s defense ministry said.

Iran and Russia are OPEC+’s two leading oil producers and any further supply disruptions in the region can put the global oil market in a serious deficit, according to analysts. “The market waits for clarity from OPEC+ on its output policy,” two analysts from ING Bank said. The group is expected to convene early next month.

Downward pressure:

Brent’s price gains were capped as the global oil market grew wary of a slowdown in oil demand growth in the world’s largest oil consumer – the US.

Crude oil inventories in the US gained 2.48 million bbls in the week ended 17 May, according to the American Petroleum Institute (API) estimates, as opposed to market expectation of a 3.1-million-bbl draw.

A rise in US crude stocks is often considered a negative indicator of demand growth.

“[Brent] Crude oil trades lower for a third day amid softness in the physical market and after the API reported increases in crude and gasoline stocks,” analysts from Saxo Bank’s strategy team said.

The market’s narrative of ‘higher-for-longer’ interest rates this year strengthened after bearish remarks from the US Federal Reserve's (Fed) officials.

“It does seem clear the [Fed] Committee remains biased to cut rates, but any policy easing will be determined by how inflation develops over the next few months,” Jordan Jackson, global market strategist at J.P. Morgan said.

Higher interest rates can dampen oil demand by increasing the cost of dollar-denominated commodities like oil for non-dollar holders.

By Manjula Nair and Aparupa Mazumder

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