Americas Market Update 16 Jan

Bunker fuel prices have moved higher across ports in the Americas, and bunkering operations at GOLA are expected to resume today.

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

Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Zona Comun ($17/mt), Houston ($12/mt), Balboa ($11/mt), New York ($8/mt) and Los Angeles ($5/mt)
• LSMGO prices up in Houston ($34/mt), Zona Comun ($20/mt), New York ($16/mt), Balboa ($15/mt) and Los Angeles ($8/mt)
• HSFO prices up in Balboa ($7/mt), Houston ($6/mt), Los Angeles ($5/mt) and New York ($3/mt)

Houston's LSMGO price has increased by the highest measure across all ports and grades, after a higher-priced 50–150 mt stem, fixed at $605/mt, has put upward pressure on the benchmark.

Recommended lead times for all three conventional fuel grades in Houston stand at 7–10 days this week. Some suppliers have advised additional lead times, particularly for HSFO, a source said.

In the Galveston Offshore Lightering Area (GOLA), bunkering deliveries were suspended due to rough weather conditions and are expected to resume today.

Beginning Saturday, prolonged delays in bunker deliveries are expected at the anchorage due to high wind gusts blowing through the US Gulf region and elevated seas reaching up to 5 feet.

Balboa's HSFO price has recorded the highest gain of $7/mt within the grade, while the port's VLSFO has jumped by $11/mt, narrowing the port's Hi5 spread to $48/mt today from $56/mt last Friday.

Availability remains normal, with all three conventional grades available at Balboa within lead times of 3–5 days, according to a trader.

Brent

The front-month ICE Brent contract has gained $0.7/bbl on the day to trade at $64.40/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent’s price this week has been driven primarily by heightened geopolitical risks and concerns over crude oil supply disruptions, market analysts said.

Kazakh oil shipments from the Caspian Pipeline Consortium (CPC) terminal are expected to come under “significant pressure” this month, according to two analysts from ING Bank.

Exports are expected to come in between 800,000 b/d – 900,000 b/d, or around 45% below initial expectations, Bloomberg reports.

“The drop is due to maintenance and damage caused by Ukrainian drones, while weather has also been an issue,” ING Bank’s analysts said.

Downward pressure:

Brent crude has faced downward pressure on easing fears of an imminent US intervention in Iran’s ongoing unrest.

Yesterday, US President Donald Trump told reporters that “killing in Iran is stopping”, adding that the US administration would be very upset if the Islamic Republic continued its crackdown on protestors.

“This reduced the likelihood of US intervention and possible disruptions to Iranian oil production and nearby shipping lanes,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Any escalation with Tehran will further raise concerns about potential disruptions to oil flows through the Strait of Hormuz, according to market analysts.

“The sell-off came as the US avoided taking immediate action against Iran amid ongoing protests in the country,” ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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