Americas Market Update 19 Mar

Fuel prices have moved in mixed directions, and rough weather is delaying bunker deliveries at the Freeport anchorage.

IMAGE: A vessel moving into Galveston Bay from the Gulf of Mexico. Getty Images.

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

• VLSFO prices up in Houston ($50/mt) and down in Balboa ($21/mt)
• LSMGO prices up in Houston ($63/mt)
• HSFO prices down in Houston ($4/mt)

The steep dip in Balboa's VLSFO price has defied Brent's upward movement. Two lower-priced 500–1500 mt stems, booked at $860/mt and $817/mt, may have put downward pressure on the benchmark.

Bunker demand in Panama is currently on the rise, resulting in longer-than-usual lead times. Prompt supply for all three conventional grades is tight and requires at least a week to secure avails, a source said.

At the anchorage in Freeport, Bahamas, bunker deliveries are delayed due to rough weather conditions in the region. However, in-port deliveries are ongoing, while a key supplier is trying to move ships to layberth to work through the backlog, a trader told ENGINE.

Houston's HSFO and VLSFO price movements over the past session have narrowed the port's Hi5 spread to $85/mt today from $139/mt yesterday.

Lead times for all three conventional fuel grades stand at 7–10 days in Houston this week, a source said.

Brent

The front-month ICE Brent contract has gained by $4.63/bbl on the day, to trade at $112.84/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has surged by more than $12/bbl after Iran targeted energy infrastructure across the Middle East in response to Israeli strikes on Iran’s South Pars gas field yesterday.

Key Gulf energy producers, including Saudi Arabia, Kuwait, Iraq and Qatar, continue to face Iranian strikes, with Saudi Aramco’s Samref refinery at the Red Sea port of Yanbu among the main targets in missile attacks earlier today.

“This raises fears of a more prolonged disruption to Persian Gulf energy supplies,” two analysts from ING Bank said.

With no signs of de-escalation, Brent is likely to rally this week, according to market analysts.

“The UAE’s daily oil output is down by 1.8mb/d [1.8 million b/d] since February. Kuwait’s oil production has dropped to about 1.3m b/d [1.3 million b/d] from 2.6mb/d [2.6 million b/d] last month,” ANZ Bank’s senior commodity strategist Daniel Hynes said, citing Bloomberg data.

Downward pressure:

Brent’s price has come under some downward pressure after the US Energy Information Administration (EIA) reported a sizeable build in US crude stocks.

Commercial US crude oil inventories increased by 6.2 million bbls to 449 million bbls in the week ending 13 March, according to data from the EIA.

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

By Gautamee Hazarika and Aparupa Mazumder

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