Americas Market Update 10 Apr

Bunker fuel prices have mostly moved downwards, and disruptions to deliveries at GOLA are expected through Monday.

IMAGE: Cranes in the Port of New York and a silhouette of the Statue of Liberty. Getty Images.

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

• VLSFO prices up in Los Angeles ($2/mt), and down in Zona Comun ($41/mt), Houston ($32/mt), New York ($25/mt) and Balboa ($17/mt)
• LSMGO prices up in Los Angeles ($195/mt), and down in New York ($96/mt), Balboa ($89/mt), Zona Comun ($50/mt) and Houston ($39/mt)
• HSFO prices up in Los Angeles ($59/mt), and down in New York ($41/mt), Balboa ($32/mt) and Houston ($20/mt)

All key ports in the Americas have tracked Brent’s downward trend, except for Los Angeles, where all three conventional fuel grades have recorded gains over the past day.

Due to the price of HSFO increasing more than the price of VLSFO at Los Angeles, the port's Hi5 spread has narrowed to $153/mt today, down from $210/mt yesterday.

At the twin ports of Los Angeles and Long Beach, HSFO and LSMGO need lead times of around 7–9 days, while VLSFO has remained relatively tighter, with recommended lead times of 9–11 days.

New York’s LSMGO price has recorded the steepest decline among the grades and is currently trading at a premium of $119/mt to Houston and at discount of $289/mt discount to Los Angeles.

In the US Gulf region, the fog season has entered its final phase and continues to cause occasional disruptions to bunkering operations, a source said.

At the Galveston Offshore Lightering Area (GOLA), disruptions to bunkering operations are expected to begin today and continue until 13 April due to strong wind gusts and rough sea conditions.

Brent

The front-month ICE Brent contract has lost $2.63/bbl on the day, to trade at $95.84/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude prices have remained broadly steady, supported by concerns over Saudi supply disruptions and as tanker traffic through the critical Strait of Hormuz continued to be largely stalled.

Attacks on Saudi Arabia’s energy infrastructure - including oil and gas production, transportation, refining, petrochemical facilities, and parts of the electricity sector across Riyadh, the Eastern Province, and Yanbu Industrial City - have reduced the kingdom’s oil production capacity by around 600,000 b/d. Throughput along the East-West Pipeline has also declined by approximately 700,000 b/d, according to the state-run Saudi Press Agency, citing an official from the Ministry of Energy.

Oil has received some support “amid fresh Middle East supply concerns,” two analysts from ING Bank said.

“Concerns of further oil supply disruptions were heightened after Saudi Arabia’s press agency said the nation’s oil production capacity has been cut by around 600kb/d due to attacks on energy infrastructure,” added Daniel Hynes, senior commodity strategist at ANZ Bank.

At the same time, a fragile two-week ceasefire between the US and Iran began to show signs of strain within a day. Washington accused Tehran of breaching commitments related to the Strait of Hormuz, while Israel launched strikes on Lebanon that Iran claims violate the truce.

The upward pressure also came “as the US-Iran ceasefire failed to allay fears of further supply disruptions,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“Even if transit through the Strait of Hormuz resumes, the return of energy supplies is unlikely to be immediate. Output has already been reduced at oil and gas fields, while refinery operations have been curtailed or temporarily shut, suggesting that some supply disruptions may take weeks, or longer, to fully reverse,” ING Bank analysts warned.

Downward pressure:

Brent crude prices faced mild downward pressure after the latest weekly inventory data from the US Energy Information Administration (EIA).

US commercial crude inventories increased by 3.1 million bbls to 464.7 million bbls in the week ending 3 April, according to the EIA.

By Gautamee Hazarika and Tuhin Roy

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