Americas Market Update 2 Sep

Fuel prices have mostly gained, and weather in New York is expected to be conducive for bunkering operations this week.

IMAGE: Aerial view of dry docks and shipping containers in New York. Getty Images

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

• VLSFO prices up in Los Angeles ($18/mt), New York, Balboa ($15/mt) and Zona Comun ($14/mt), and unchanged in Houston
• LSMGO prices up in Balboa ($40/mt), Zona Comun ($36/mt), Los Angeles, Houston ($30/mt) and in New York ($29/mt)
• HSFO prices up in Los Angeles ($15/mt), New York ($11/mt), Houston ($10/mt) and Balboa ($2/mt)

New York's VLSFO price has increased following Brent's upward movement over the past day, while Houston's VLSFO price remains unchanged.

A lower-priced, 500-1,500 mt stem, fixed at Houston at $691/mt, may have limited the grade's gains.

Due to this, New York's VLSFO premium to Houston has widened to $56/mt over the past session.

Weather conditions in New York are good, with calm winds blowing near the anchorage, a trader said. Conditions are expected to remain calm through the week, allowing bunkering operations to run smoothly.

Fuel demand in New York is normal, and availability is good for all three grades. Lead times for HSFO, VLSFO and LSMGO range between 3–7 days, a source said.

Brent

The front-month ICE Brent contract has gained by $1.76/bbl on the day, trading at $94.29/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has rallied as tensions between the US and Iran escalated this week.

Oil has reached its “highest level in more than a month,” as tensions in the Persian Gulf escalated further, two analysts from ING Bank noted.

The US Central Command (CENTCOM) has resumed strikes on Iranian assets, while Tehran has warned of major consequences if Washington continues its drone barrage in the region.

“Iran hit two oil tankers in the region yesterday. The US, meanwhile, carried out additional overnight strikes on Iranian targets, adding fresh geopolitical risk premium to the market,” ING Bank’s analysts added.

Downward pressure:

Brent’s price has come under some downward pressure following a positive statement from US secretary of energy Chris Wright.

‌Wright claimed ​that 17 ​million bbls of ⁠crude oil transited ​the Strait ​of Hormuz on Monday, Reuters reported.

The uptick in flows ​marked the ​highest level of ‌crude ⁠oil to pass through the narrow waterway in recent months, Reuters added citing Wright.

“When you factor in bypass volumes, it suggests Persian Gulf oil flows are above pre-war levels. But these numbers are uncertain,” ING Bank’s analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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