Americas Market Update 15 Apr

Fuel prices have mostly moved downwards, and the Houston Ship Channel is currently closed due to the arrival of naval vessels.

IMAGE: The US Gulf Coast beach of Galveston, Texas. Getty Images.

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

• VLSFO prices down in New York ($41/mt), Balboa ($36/mt), Houston ($33/mt), Los Angeles ($28/mt) and Zona Comun ($12/mt)
• LSMGO prices up in Zona Comun ($11/mt), and down in New York ($96/mt), Los Angeles ($42/mt), Balboa ($39/mt) and Houston ($1/mt)
• HSFO prices down in Los Angeles ($23/mt), Houston ($18/mt), Balboa ($12/mt) and New York ($7/mt)

Zona Comun's LSMGO price defied the general market direction, increasing over the past day. It is currently trading at premiums of $162/mt to Bahia Blanca and $89/mt to Buenos Aires in Argentina.

Although deliveries are currently underway at Zona Comun, chances of possible disruptions at the anchorage location are forecast until 17 April due to high wind gusts, a trader said.

New York's VLSFO price has plunged the most among the three conventional fuel grades. Meanwhile, the port's HSFO price declined by only $7/mt, narrowing the port's Hi5 spread to $114/mt from $148/mt yesterday.

In New York, bunker demand is healthy, with improved availability compared with the previous week. VLSFO and LSMGO are available from most suppliers within 5–7 days, while HSFO may require up to 8 days for delivery.

In the US Gulf Coast, the Houston Ship Channel is closed to make way for the arrival of naval ships for the Houston Fleet Week parade.

Bunker demand in Houston is steady, although availability continues to fluctuate and is tight for prompt supply across all three conventional fuel grades, a source said.

Brent

The front-month ICE Brent contract has lost $2.56/bbl on the day, to trade at $95.30/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure after US Central Command (CENTCOM) said a blockade of Iranian ports bas been fully implemented.

No vessels have made it past the US blockade since yesterday, the US CENTCOM said, adding that six 6 merchant vessels “complied with direction from U.S. forces” to turn around to re-enter an Iranian port on the Gulf of Oman.

“Vessel transits via the Strait of Hormuz could come to a complete halt, as Iran may strive itself to block any other transits,” remarked tanker tracking firm Vortexa’s senior market analyst Xavier Tang.

Downward pressure:

Brent’s price has moved lower on hopes of renewed ceasefire talks between the US and Iran.

Both parties are arranging a second round of talks in the coming days before the two-week ceasefire agreement expires, Bloomberg reported.

Iran is considering pausing its oil shipments through the Strait of Hormuz, following the US blockade of the vital waterway, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

“This would ease tensions and possibly pave the way for more constructive talks,” Hynes said.

Prices came under further downward pressure after the American Petroleum Institute (API) reported a 6.1 million bbls increase in US crude inventories.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Gautamee Hazarika and Aparupa Mazumder

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