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ENGINE: Europe & Africa Bunker Fuel Availability Outlook

09 Sep 2021

The following article regarding Europe and Africa bunker fuel availability outlook has been provided by online marine fuel procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

9 September, 2021

Rising exports have pulled fuel oil out of ARA storage, and ample VLSFO supplies in Russian Baltic Sea ports has weighed on prices.

Independent fuel oil inventories in the ARA fell by 1% to five-week lows of 7.46 million bbl last week, while the hub’s gasoil stocks were broadly steady, Insights Global data for the week to 2 September showed. Fuel oil export rose on the week, with cargoes going to Scandinavia, Gibraltar Strait, east Mediterranean, West Africa and the Caribbean.

Rotterdam’s forward curves for HSFO380 and VLSFO are in continuous backwardation for the next six months, with a $22/mt difference between the front-month and sixth month for HSFO, and a $13/mt difference for VLSFO. Backwardated prices can make it less lucrative to store products in the ARA.

Bunker fuel oils and gasoil remain widely available for prompt deliveries in the ARA region, with no significant supply interruptions.

HSFO380 is tight for prompt delivery dates in Skaw, mostly because relatively low demand does not incentivise suppliers to allocate more barge tank space to the grade. At least two barges carry the grade in the Danish offshore bunker location.

VLSFO prices in Russian Baltic Sea ports have dropped sharply against prices in the ARA since the end of August. St. Petersburg and Ust-Luga’s prices have been at marked discounts to Rotterdam, coming from more similar levels in previous weeks. 

A bunker supplier in St. Petersburg recently started receiving VLSFO from a new refinery source, which may have added more of the grade to the bunker market and put downward pressure on prices. 

St. Petersburg and Ust-Luga exported significantly more low sulphur fuel oil in August than in previous months, in a sign of more amble supplies. Cargoes went to Estonia, Denmark, the Netherlands, Spain, Bahamas and India.

Fuel availability is also ample in Gibraltar Strait ports, while HSFO380 continues to be tight in the Canary Islands. Three suppliers are offering the high sulphur grade in the Canary Islands, and stocks are running low for one of them.

High winds are forecast to hit the Gibraltar Strait ports from the west from Wednesday evening until Thursday morning and could disrupt deliveries. There is no congestion in the ports, but two suppliers remain 2-5 hours behind in their bunkering schedules, port agent MH Bland says.

Winds bordering on gale-strength and swell of around 3 metres is forecast in Port Elizabeth and Algoa Bay on Thursday. Shipping agent Sturrock Grindrod has warned this bout of rough weather could suspend deliveries, as it has on several occasions in recent weeks.

 

Photo credit: ENGINE
Published: 9 September, 2021

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