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ENGINE: Europe & Africa Bunker Fuel Availability Outlook

ARA fuel oil stocks have slumped to multi-month lows amid backwardation, and supply has tightened with a supplier in Gibraltar.

ARA’s independent fuel oil inventories fell to their lowest point since March 2020 last week, according to Insights Global estimates.

Backwardation in fuel oil forward curves has contributed to make it less lucrative to store product and could have triggered consecutive draws in most weeks since early August.

The vast majority of ARA’s fuel oil exports headed for Saudi Arabia in the week, and this was all HSFO, according to vessel tracking. Saudi Arabia typically imports HSFO for power generation.

Even as ARA’s fuel oil stocks have been drawn down to multi-month lows, prompt VLSFO and HSFO380 bunker supply is available with most suppliers in the bunkering hub.

A supplier is unable to offer VLSFO in Gibraltar after running low on product. Other suppliers have more ample stocks to supply for prompt dates. Availability is steady in Algeciras, Ceuta and the Canary Islands, which may present more attractive options if supply tightens further in Gibraltar.

Congestion eased in Gibraltar on Wednesday after a supplier caught up with most of its backlog from Tuesday. Three ships were still waiting to bunker with the supplier, port agent MH Bland said.

High swells could disrupt bunkering at Las Palmas’ outer anchorage from Thursday to Monday. The port’s inner anchorage has more limited space and typically gets congested during disruptions at the outer anchorage.

Malta has gale-strength wind gusts blowing from the from the southeast forecast for Thursday, threatening more suspensions to bunkering in designated areas off its eastern coast. Bunkering was suspended in several of Malta’s offshore areas last week.

HSFO380 can be tight for prompt dates off Malta, sustaining its price premiums over nearby Gibraltar and Piraeus. Malta has readily available VLSFO and LSMGO supplies when the weather permits.

High swells in Algoa Bay could hold up deliveries between Thursday and Saturday. Algoa Bay and adjacent Port Elizabeth continue to price bunker fuels at big premiums over other South African ports, including $30/mt higher than in Durban for VLSFO, and $50/mt higher for LSMGO.
Source: ENGINE (https://engine.online/)

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