Americas Market Update 12 May

Fuel prices have moved in mixed directions, and delays in bunker deliveries at Zona Comun due to rough weather and vessel backlogs is possible.

IMAGE: Boats docked at the Marina on Galveston Island. Getty Images.

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

• VLSFO prices up in Balboa, Houston ($52/mt), Los Angeles ($30/mt) and New York ($13/mt), and down in Zona Comun ($5/mt)
• LSMGO prices up in Houston ($127/mt), New York ($60/mt), Balboa ($53/mt) and Los Angeles ($25/mt), and down in Zona Comun ($62/mt)
• HSFO prices up in Los Angeles ($23/mt) and Balboa ($19/mt), and down in New York ($21/mt) and Houston ($19/mt)

Zona Comun’s VLSFO and LSMGO price benchmarks have moved lower, despite Brent’s upward movement.

While deliveries are currently underway, operations are expected to be suspended this evening due to high wind gusts above 20 knots at the anchorage location.

"Suppliers have been facing delays in making deliveries/reloading over the last several days, so backlog will cause delays," a trader tells ENGINE.

The port of Houston’s LSMGO price benchmark has recorded the biggest gain among the three fuel grades across the key Americas hubs over the past day.

Two higher-priced 150-500 mt LSMGO stems, booked at $1328/mt and $1190/mt, have exerted upward pressure on the benchmark.

Availability for prompt supply remains tight across HSFO, VLSFO, and LSMGO, with recommended lead times exceeding five days this week at Houston.

Brent

The front-month ICE Brent contract has gained $3.57/bbl on the day, to trade at $107.17/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has continued to move higher on the prospect of further escalation in the Middle East, with the Strait of Hormuz already shut by Iran and additionally subject to a US blockade.

US President Donald Trump told reporters that ceasefire with Tehran is on “life support,” the BBC reported. The news has raised fresh concerns in the oil market and pushed Brent’s price higher.

“The escalation in tensions raised concerns that oil supplies from Persian Gulf producers will remain curtailed for the foreseeable future,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Meanwhile, Iran’s speaker of parliament Mohammad Bagher Ghalibaf has warned the US of a “well-deserved” response to any further aggression.

“While there is a trickle of vessels transiting the strait, it is a fraction of the pre-conflict traffic,” Hynes added.

Downward pressure:

Trump is expected to meet Chinese President Xi Jinping during a state visit to Tiananmen Square in Beijing later this week. The news has put some downward pressure on Brent’s price.

“While optimism for an imminent deal is fading, there remains a glimmer of hope that talks between Trump and Chinese President Xi later this week could yield positive results on Iran,” two analysts from ING Bank said.

The visit is expected to include discussions aimed at providing greater clarity on the ongoing Middle East situation and laying the foundation for future cooperation.

“The hope is that China can use its influence over Iran to push it closer towards a peace deal,” ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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