Americas Market Update 1 July

Fuel prices have declined in the Americas, and adverse weather could cause delivery delays off Trinidad.

IMAGE: Container terminal at Port of Spain, Trinidad and Tobago.Getty Images.

Changes on the day to 08.00 CDT (13.00 GMT) today:

• VLSFO prices down in Houston ($19/mt), New York ($18/mt), Los Angeles ($12/mt), Balboa ($9/mt) and Zona Comun ($8/mt)
• LSMGO prices down in Zona Comun ($52/mt), New York ($26/mt), Los Angeles ($20/mt), Balboa ($13/mt) and Houston ($8/mt)
• HSFO prices down in Houston ($19/mt), Los Angeles ($11/mt), New York ($10/mt) and Balboa ($7/mt)

Fuel prices have dipped across all key hubs in the Americas, tracking Brent's downward movement over the past day.

Balboa's LSMGO price has declined after a lower-priced 150-500 mt LSMGO stem, fixed at $1,024/mt, weighed on the benchmark.

The port's VLSFO price has also declined after a lower-priced 500-1,500 mt VLSFO stem, fixed at $632/mt, put downward pressure on the benchmark.

In Panama, bunker demand is steady, and availability of VLSFO and LSMGO is good in both Balboa and Cristobal.

Both grades can be delivered within lead times of 3-5 days, a source said. HSFO supply is bit under pressure and is expected to tighten further this week, a source said.

Off Trinidad, bunker deliveries might be delayed due to high seas and strong winds in the region. Disruptions are expected to continue until 5 July, a trader said.

Brent

The front-month ICE Brent contract has lost $1.26/bbl on the day, to trade at $72.04/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported a sizeable decline in US crude stocks.

US crude oil inventories recorded a decline of 6.1 million bbls in the week ending 26 June, according to estimates from the API.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

“Numbers overnight from the API show that US crude oil inventories continue to fall despite some normalisation in Persian Gulf flows,” two analysts from ING Bank noted.

Downward pressure:

The global oil market has continued to remain optimistic on a supply recovery from the Persian Gulf, despite recent fire exchanges between the US and Iran, market analysts said.

Indirect talks between Washington and Tehran are expected to continue in Doha, Qatar, this week, adding some positive outlook to the ceasefire negotiations.

“Oil prices came under further pressure… dragged down by growing confidence that Persian Gulf crude flows are on the mend,” ING Bank’s analysts said.

There has been a small uptick in inbound vessel traffic in the Strait of Hormuz, suggesting that vessel owners are becoming increasingly confident about moving into the Persian Gulf.

The market has “seen a tentative pick-up of vessels transiting the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said, adding about 24 ships, including oil and LNG tankers, travelled through the key waterway on Monday.

By Gautamee Hazarika and Aparupa Mazumder

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