Americas Market Update 15 Oct

Fuel prices have moved in mixed directions, and fuel availability is good at the ports in Panama.

IMAGE: Cargo port with cranes and shipping containers along the entrance to the Panama Canal. Getty Images

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

• VLSFO prices unchanged in Balboa, and down in Houston ($19/mt), Los Angeles ($9/mt), Zona Comun ($5/mt) and New York ($4/mt)
• LSMGO prices up in Balboa ($1/mt), unchanged in Houston, and down in Los Angeles ($12/mt), New York and Zona Comun ($4/mt)
• HSFO prices up in Houston ($31/mt), and down in Balboa ($18/mt), Los Angeles ($6/mt) and New York ($2/mt)

Balboa’s HSFO price has posted the largest decline over the past session. A lower-priced, 500-1,500 mt stem, fixed at the port at $715/mt, may have weighed on the benchmark, in addition to the impact of Brent's decline.

Meanwhile, the port’s VLSFO price has held steady over the past day. These price movements have widened the Hi5 spread to $86/mt today, from $68/mt Wednesday.

Bunker demand in Panama is strong, and no weather disruptions are expected at Balboa and Cristobal. VLSFO and LSMGO availability is good at both ports, with recommended lead times of 3-6 days.

HSFO requires slightly longer lead times of 4-7 days, a source said.

Rough weather has delayed bunker operations at the Galveston Offshore Lightering Area (GOLA) over the past week. High wind gusts and rough seas could disrupt operations there from 16-18 October.

Brent

The front-month ICE Brent contract has lost $0.82/bbl on the day, trading at $104.66/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure from a sharp draw in US crude oil inventories.

US crude oil inventories decreased by 11.12 million bbls in the week ending 9 October, according to estimates from the American Petroleum Institute (API).

A draw in US crude stocks typically indicates stronger demand for oil and can support Brent’s price.

Two container ships were struck by unknown projectiles while transiting the Strait of Hormuz, the United Kingdom Maritime Trade Operations (UKMTO) agency reported yesterday. Both vessels reported minor damage and continued their passage.

Iran’s focus is shifting beyond the Strait of Hormuz, with attacks on vessels in the Gulf of Oman and around the port of Fujairah becoming more common, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has pressure weighing it down after the US signalled it could ease sanctions on shadow fleet vessels.

The Donald Trump-led US administration is considering easing sanctions on vessels that have carried oil from countries including Russia, Iran and Venezuela, in a bid to cut record freight costs, Reuters reported citing a US official.

Recovering supply from the Persian Gulf has also capped Brent’s gains today. Crude oil exports from Gulf producers rose by 4.4 million b/d to 13.90 million b/d in September, more than 75% of pre-war levels, the International Energy Agency (IEA) said in its monthly oil market report yesterday.

The IEA also expects global oil demand to fall by 2.60 million b/d this year, as higher oil prices and a weaker economic outlook weigh on consumption.

By Gautamee Hazarika and Aparupa Mazumder

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