Americas Market Update 18 Feb

Fuel prices have mostly moved upwards across key ports, and extremely cold conditions in New York have eased, helping clear earlier delays.

IMAGE: Cargo containers being offloaded in the Port of Los Angeles. Getty Images.

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

• VLSFO prices up in Houston ($10/mt), Balboa ($6/mt), Los Angeles ($4/mt) and New York ($3/mt)
• LSMGO prices up in Balboa ($9/mt), Los Angeles and Houston ($6/mt), and unchanged in New York
• HSFO prices up in Los Angeles, Balboa ($3/mt), New York ($2/mt) and Houston ($1/mt)

Houston's VLSFO price benchmark has gained the highest across all ports and grades in the past session.

Meanwhile, the port's HSFO price has gained by the lowest measure, widening the port's Hi5 spread to $101/mt, up from $57/mt three months ago on 18 November.

Seasonal fog has continued to cause intermittent closures to the Houston Ship Channel, resulting in delays to bunker barge operations, a source said.

LSMGO availability is normal at the port, with lead times of 5–7 days. VLSFO and HSFO are tight for prompt delivery and require lead times of at least 7–10 days.

New York's LSMGO price has remained unchanged. It is currently trading at premiums of $129/mt to Houston and $30/mt to Los Angeles.

Warmer temperatures have arrived in New York, alleviating icy conditions and strong winds, which have helped clear cargo terminal delays, a source said.

LSMGO availability at the port is expected to tighten as the week progresses, with lead times of 4–5 days.

Brent

The front-month ICE Brent contract has gained by $0.76/bbl on the day to trade at $69.29/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent’s price has held its ground after the US army seized another Venezuela-linked oil tanker allegedly carrying sanctioned oil.

The US Department of War (DoW) said in a statement that the Panamanian-flagged oil tanker Veronica III was seized in the Indian Ocean.

The move marks the second such incident in a week, according to Price Future Group’s senior market analyst Phil Flynn.

“Tracked all the way from the Caribbean, the vessel [Veronica III] was carrying nearly 2 million barrels [bbls] of crude and fuel oil linked to sanctioned Venezuelan networks,” Flynn said.

The US government has said it will continue its efforts to crack down on Venezuelan and Iranian oil trade, which the Donald Trump-led administration has deemed illicit.

Downward pressure:

Brent’s price has moved lower amid signs of a breakthrough in US-Iran nuclear negotiations, held in Geneva yesterday.

Washington and Tehran have reached an understanding on “guiding principles” aimed at discussing the latter’s nuclear enrichment programme, Reuters reported citing Iran’s Foreign Minister Abbas Araqchi.

Meanwhile, a representative from Washington said that Iran will submit a detailed proposal in the coming two weeks, in a step to take yesterday's discussions forward, Reuters reported.

However, it is important to note that yesterday’s discussions don’t mean that a final deal has been cracked between the two countries.

“The decline [in Brent’s price] was largely driven by reports that Iran has reached a “general agreement” with the US on the terms of a potential deal,” two analysts from ING Bank noted.

By Gautamee Hazarika and Aparupa Mazumder

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