Americas Market Update 10 July

Most bunker prices in major Americas locations have followed Brent down in the past day, with notable exceptions in Los Angeles.

IMAGE: Maersk and CMA CGM container ships docked in Los Angeles. Port of Los Angeles

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

• VLSFO prices up in Los Angeles ($4/mt), and down in Balboa ($31/mt), Houston ($23/mt), Zona Comun ($16/mt) and New York ($2/mt)
• LSMGO prices down in Zona Comun ($24/mt), Houston ($16/mt), New York ($11/mt), Balboa ($8/mt) and Los Angeles ($6/mt)
• HSFO prices up in Los Angeles ($21/mt), and down in Houston, Balboa ($11/mt) and New York ($3/mt)

Los Angeles’ VLSFO benchmark has moved against the market after a 150-500 mt stem was fixed at $710/mt with delivery in more than seven days. That stem price was above the previous benchmark and applied upward pressure.

The port’s HSFO has been indicated in a wide $610-655/mt range, with the higher price point pulling up the benchmark.

A 500-1,500 mt HSFO stem has been fixed in Houston with a 3-7-day lead time. That was below the previous benchmark.

Four Houston suppliers can deliver VLSFO and LSMGO with lead times of around a week, and possibly shorter too. Bunker activity picked up in Houston and other US Gulf Coast locations in the middle of this week.

In Bolivar Roads, a supplier’s earliest VLSFO delivery date is eight days out. Four other suppliers can deliver in 6-8 days.

Prompt LSMGO is available in Freeport, Bahamas. A supplier’s earliest delivery date is four days out.

Brent

Front-month Brent has retreated by $2.25/bbl after surging higher in the mid-week. The crude benchmark traded at $76.41/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Oil prices have gained upward support as renewed fighting between the US and Iran has revived concerns over potential supply disruptions from the Middle East. There has been a slowdown in shipping traffic through the Strait of Hormuz.

Iranian armed forces launched attacks on US military infrastructure in Gulf states on Thursday in response to US strikes on Iran's southern coastal and eastern provinces, further straining a three-week-old ceasefire. Iranian media reported multiple explosions across southern Iran, including in Bushehr, home to one of the country's nuclear power plants, according to Reuters.

The renewed hostilities have delayed a full reopening of the Strait of Hormuz.

“The latest escalation in US-Iran military tensions this week raises new risks,” ING Bank commodity strategist Warren Patterson said.

Downward pressure:

After a rapid increase in Brent earlier this week, its upward momentum has slowed. Market participants are assessing how a flare-up in warfare between the US and Iran could impact oil product markets over the short- and longer-term.

Brent came under some downward pressure after the US Energy Information Administration (EIA) released its latest weekly oil inventory data. Commercial US crude oil inventories rose by 3 million bbls to 411.4 million bbls in the week ending 3 July, according to the EIA.

By Erik Hoffmann and Tuhin Roy

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