Americas Market Update 16 Sep

Bunker prices have moved in mixed directions, and Houston is seeing healthy bunker demand this week.

IMAGE: A group of tankers in port along the Houston Ship Channel, Texas. Getty Images

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

• VLSFO prices up in Zona Comun ($90/mt), Los Angeles ($9/mt) and New York ($8/mt), and down in Houston ($12/mt) and Balboa ($1/mt)
• LSMGO prices up in Houston ($29/mt), Los Angeles ($27/mt), New York ($18/mt), Balboa ($16/mt) and Zona Comun ($1/mt)
• HSFO prices up in Los Angeles ($15/mt), Houston ($9/mt) and New York ($7/mt), and down in Balboa ($8/mt)

Houston's VLSFO price has declined over the past day, despite Brent's upward movement. A lower-priced 500-1,500 mt VLSFO stem was fixed at $768/mt.

The port's LSMGO price, meanwhile, has recorded the biggest gain for the grade across major ports in the Americas. A higher-priced 50-150 mt LSMGO stem was fixed at $1,498/mt.

Bunker demand has been strong in Houston this week, and availability of all three conventional grades is normal, a trader said.

Prompt HSFO supply is tight, with recommended lead times of around seven days. VLSFO and LSMGO can be delivered within 3-5 days.

The hurricane season is ongoing, and disturbances are expected in the Eastern Pacific. The US National Hurricane Center has issued marine warnings in the region.

Brent

The front-month ICE Brent contract has gained $1.61/bbl on the day, trading at $107.50/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent has continued to trade close to $110/bbl as Middle East supply concerns rattle the global oil market.

Washington has claimed that Tehran is willing to resort to diplomacy, while Iranian officials have dismissed such theories.

Oil prices have surged after the Iran-backed Houthis hit the 1,200 km East-West Pipeline, disrupting Riyadh's critical export route, which carries about 70% of Saudi crude exports to the Red Sea terminal at Yanbu, circumventing the Strait of Hormuz.

The attack “has significantly curtailed the OPEC producer’s ability to export oil", ANZ Bank senior commodity strategist Daniel Hynes said.

The pipeline shutdown could last for weeks and crude stocks at Yanbu may be depleted before pipeline operations are fully restored, market analysts said.

“The Houthi group also seized a strategic port and island directly on the Bab al-Mandeb Strait at the south end of the Red Sea,” Hynes added.

Downward pressure:

Brent's price has come under downward pressure after the American Petroleum Institute (API) reported a rise in US crude stocks.

US crude oil inventories increased by 7.14 million bbls in the week ending 11 September, the API reported.

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

By Gautamee Hazarika and Aparupa Mazumder

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