Americas Market Update 12 Oct

Fuel prices have generally trended upwards, and deliveries at GOLA are being handled on a case-by-case basis.

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 Balboa ($35/mt), Houston ($21/mt), New York ($17/mt) and Los Angeles ($14/mt), and down in Zona Comun ($32/mt)
• LSMGO prices up in Zona Comun ($81/mt), Balboa ($54/mt), Los Angeles ($38/mt), New York ($21/mt) and Houston ($12/mt)
• HSFO prices up in Los Angeles ($69/mt), Balboa ($27/mt), Houston ($17/mt) and New York ($13/mt)

Fuel prices have tracked Brent’s gains over the past session, except Zona Comun’s VLSFO price, which has declined. A lower-priced, 500-1,500 mt stem, fixed at the anchorage at $864/mt, may have weighed on the benchmark.

Houston’s LSMGO price has gained the least among key hubs in the Americas for the grade. It is currently at discounts of $263/mt to Los Angeles and $158/mt to New York.

Bunker demand in Houston has dipped slightly over the past week. Prompt availability of all three conventional grades is tight, and suppliers recommend lead times of at least five days, a trader said.

Sea conditions at the Galveston Offshore Lightering Area (GOLA) remain rough, and strong wind gusts and high seas have been forecast to disrupt operations between 9-13 October.

Deliveries are being handled case by case and could be suspended today, a source said.

Brent

The front-month ICE Brent contract has gained $3.62/bbl on the day from Friday, trading at $106.77/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Middle East tensions continue to support Brent crude futures, with escalating security risks threatening oil supplies and shipping routes.

The Iran-aligned Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport, which killed 13 people and injured more than 300. Meanwhile, further attacks on tankers transiting the Strait of Hormuz have been reported this month, threatening to undermine the recovery in Middle East crude exports seen in September, Reuters reported.

“Crude oil prices pushed higher… amid mounting risks to supply. Attacks on tankers transiting the Strait of Hormuz continue to rise, with at least 17 attacks since 28 September,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

“This threatens supply flows in the Red Sea, where the Houthis have tried to block Saudi tankers from operating. The attacks are applying upward pressure on freight costs,” Hynes added.

Downward pressure:

On Friday, Trump said Russia would immediately supply more than 2.25 million bbls of diesel to US and global markets, with additional volumes to follow later, Reuters reported.

“It would appear that the move in oil today is probably less to do with developments in the Middle East and more to do with Russia,” two analysts from ING Bank noted.

Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire. However, Ukrainian President Volodymyr Zelenskiy said he was still awaiting details of the agreement, while Russia made no comment, Reuters added.

“Trump announces Ukraine energy ceasefire with Russia, surprising Zelensky,” commented Vanda Insights founder Vandana Hari.

By Gautamee Hazarika and Tuhin Roy

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