Americas Market Update 1 June

Fuel prices have mostly moved in the upwards direction, and the commencement of the US Gulf hurricane season may impact bunker operations.

IMAGE: Container ship leaving the Port of Houston at Morgan's Point. Getty Images.

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

• VLSFO prices up in Zona Comun ($74/mt), Houston ($26/mt), New York ($18/mt) and Los Angeles ($3/mt), and down in Balboa ($14/mt)
• LSMGO prices up in Zona Comun ($125/mt), Balboa ($73/mt), New York ($39/mt) and Houston ($11/mt), and down in Los Angeles ($14/mt)
• HSFO prices up in Balboa ($34/mt), New York ($29/mt), Houston ($18/mt) and Los Angeles ($8/mt)

Zona Comun has recorded the highest price increases for VLSFO and LSMGO over the past session.

The anchorage's LSMGO price has jumped after a higher-priced 50-150 mt LSMGO stem, fixed at $1,550/mt, put upward pressure on the benchmark.

Zona Comun's VLSFO price benchmark has increased after a higher-priced 150-500 mt VLSFO stem was fixed at the port at $845/mt, putting upward pressure on the benchmark.

A record harvest season is bringing more vessels into the anchorage, and fuel prices have maintained high premiums, a source tells ENGINE.

In the US Gulf region, hurricane season has begun. This is expected to cause frequent disruptions and closures of bunkering operations at ports across the region.

Major ports that are likely to be affected include Houston, Port Bolivar, Galveston, the Galveston Offshore Lightering Area (GOLA), and nearby ports, a trader said.

Brent

The front-month ICE Brent contract has gained by $0.98/bbl on the day from Friday, trading at $92.96/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has risen at the start of the week following US airstrikes on Iranian sites over the weekend.

The US Central Command (CENTCOM) has once again targeted radar and command sites for drones in Iran – raising concerns of the fragile ceasefire to collapse.

Meanwhile, the Strait of Hormuz continues to remain closed, “disrupting more than 15mb/d [15 million b/d] of world oil supply,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

The US military called the action as “self-defense” strikes, after Iran shot down a US MQ-1 drone that was operating in the Persian Gulf.

Several vessels trying to transit the Strait have “come under attack in recent days, underscoring the risks that remain for shipowners and crew,” Hynes added.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by four to 429 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Gautamee Hazarika and Aparupa Mazumder

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