Americas Market Update 18 June

Most fuel prices in the Americas have declined, and operations in GOLA have been suspended due to rough sea conditions.

IMAGE: An LPG tanker sailing west along the Houston Ship Channel on the way to Galveston Bay. Getty Images

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

• VLSFO prices down in Houston ($34/mt), New York ($26/mt), Zona Comun ($22/mt), Balboa ($21/mt) and Los Angeles ($7/mt)
• LSMGO prices up in Zona Comun ($14/mt), and down in New York ($41/mt), Los Angeles ($23/mt), Balboa ($21/mt) and Houston ($5/mt)
• HSFO prices down in Los Angeles ($40/mt), New York ($20/mt), Balboa and Houston ($7/mt)

Prices have largely tracked Brent's downward movement across key ports in the Americas, except for Zona Comun's LSMGO benchmark, which has increased by $14/mt over the past day.

Bunkering operations are currently ongoing at the anchorage but could be suspended for a short period on the morning of 19 June, if wind speeds exceed 20 knots.

Suppliers can offer VLSFO and LSMGO at the anchorage, with expected lead times of 6–8 days this week, a source said.

Los Angeles' HSFO price has declined the most for the grade, while the port's VLSFO price benchmark has recorded the smallest decline for the grade. Despite both grades recording losses, the port's Hi5 spread has widened to $229/mt today from yesterday's $196/mt.

Operations have been suspended at the Galveston Offshore Lightering Area (GOLA) and are expected to remain affected through the afternoon of 19 June.

Another suspension is likely on the morning of 21 June, if adverse weather conditions persist, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost by $1.13/bbl on the day, trading at $78.45/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure after the US Energy Information Administration (EIA) reported a big drawdown in US crude stocks.

Commercial US crude oil inventories decreased by 8.3 million bbls to 418.2 million bbls in the week ending 12 June, according to data from the EIA.

The American Petroleum Institute (API) also reported a substantial draw of 8.33 million bbls during the same week – largely matching with the EIA estimates.

“US inventory data was tighter,” two analysts from ING Bank remarked.

A sharp fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent crude’s price.

“EIA figures show crude stocks fell by 8.3m [8.3 million] barrels last week, well above expectations and the largest draw since mid-February, broadly in line with the API data,” the two ING Bank analysts added.

Downward pressure:

Brent’s price has continued to decline, following a fast-tracked US-Iran peace deal, with terms effective immediately.

US President Donald Trump signed the deal during his visit for the G7 meeting in France. The text of the agreement includes the reopening of the Strait of Hormuz and a complete halt to all regional hostilities including attacks on Lebanon.

“Oil prices extend declines as the US and Iran sign a peace agreement, with Middle East supply expected to recover sooner than previously anticipated,” ING Bank’s analysts said.

The US will lift its blockade of Iranian ports and the Strait of Hormuz, Trump said earlier. Washington will also waive some sanctions on Iran, immediately allowing Iran to sell its oil freely to the global oil market.

“Iran expects a swift lifting of US oil sanctions, supporting a return of exports,” ING Bank’s analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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