Americas Market Update 16 June

Fuel prices have moved in mixed directions, and bunker operations in Zona Comun have been suspended due to strong wind gusts.

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 up in Balboa ($25/mt), Los Angeles ($21/mt) and New York ($2/mt), and down in Houston ($26/mt) and Zona Comun ($16/mt)
• LSMGO prices down in Los Angeles ($34/mt), New York ($25/mt), Houston ($22/mt), Balboa and Zona Comun ($13/mt)
• HSFO prices down in Balboa ($29/mt), Houston ($22/mt), New York ($11/mt) and Los Angeles ($10/mt)

Two higher-priced VLSFO stems, fixed at Balboa between $684-780/mt over the past session, has put upward pressure on the port's benchmark.

Meanwhile, the port's HSFO price has recorded the steepest decline among all grades. A lower-priced 500-1,500 mt HSFO stem, fixed at $694/mt, has weighed on the benchmark.

These price movements have widened the port's Hi5 spread to $29/mt today.

Weather forecasts for Balboa remain good and no disruptions are expected in the near future.

In Zona Comun, bunkering operations are currently suspended due to high wind gusts which exceed 20 knots. Furthermore, additional delays are expected from late 17 June to early 19 June, according to a trader.

VLSFO and LSMGO availability is normal at the anchorage, with expected lead times between 7-8 days.

Brent

The front-month ICE Brent contract has lost by $2.84/bbl on the day, trading at $80.32/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Market participants are still analysing the viability of the US-Iran peace deal.

Brent futures has gained some support amid concerns that the resumption of normal shipping traffic through the Strait of Hormuz, and a recovery in oil supplies, will not be immediate.

“This is an important juncture in the Middle East conflict. However, any recovery of oil supplies will likely take months. Shipping companies will need assurances that the key waterway is free of mines before they resume transits on a large scale,” ANZ Bank’s senior market strategist Daniel Hynes said.

Crude oil inventories in the US Strategic Petroleum Reserve have fallen to around 340 million bbls, their lowest level since 1983. Stocks have fallen sharply following continued drawdowns under the US commitment to supply 172 million bbls to the International Energy Agency’s (IEA) coordinated effort to stabilise global oil supplies amid the Middle East conflict, two analysts from ING Bank said.

Downward pressure:

Brent crude’s price has declined amid growing optimism over the reopening of the Strait of Hormuz after US President Donald Trump announced a preliminary peace deal with Iran.

Iran’s Foreign Minister Abbas Araqchi said on Tuesday that the two sides would discuss the details of the agreement in Switzerland on Friday to reach a final deal, Reuters reported.

“Crude oil prices slumped after the US and Iran announced they had reached a deal to end the Middle East conflict. The two sides are set to sign the memorandum of understanding in Switzerland on Friday,” Hynes said.

The final text of the agreement is expected to be released in the coming days.

By Gautamee Hazarika and Shilpa Sharma

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