Americas Market Update 20 Aug

Fuel prices across the Americas have recorded gains, and US' National Hurricane Centre has issued an advisory on Hurricane Lala.

IMAGE: Large container ship passes through the Panama Canal. Getty Images

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

• VLSFO prices up in Zona Comun ($35/mt), New York ($23/mt), Los Angeles ($20/mt), Houston ($11/mt) and Balboa ($3/mt)
• LSMGO prices up in New York ($62/mt), Balboa ($53/mt), Zona Comun ($48/mt), Los Angeles ($36/mt) and Houston ($34/mt)
• HSFO prices up in Los Angeles ($28/mt), New York ($26/mt), Balboa ($10/mt) and Houston ($9/mt)

Balboa's LSMGO price benchmark has increased after a higher-priced, 0–50 mt stem, booked at $1,371/mt, put upward pressure on the benchmark.

In Panama, bunker demand has declined compared with the past few weeks, a trader said.

On the supply side, Balboa and Cristobal have reported steady availability, with HSFO, VLSFO and LSMGO requiring 5–7 days of lead time.

The Atlantic hurricane season is underway. The National Hurricane Center has issued advisories for Hurricane Lala in the eastern Pacific.

Zona Comun's VLSFO price has increased the most among the three conventional fuel grades. Both VLSFO and LSMGO are available via barges, with lead times of 6–7 days. Five barges are currently operating at the anchorage, a trader said.

Brent

The front-month ICE Brent contract has gained by $2.71/bbl on the day, to trade at $93.80/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price is headed towards the $95/bbl mark, as expectations of a peace accord between Washington and Tehran, leading to the reopening the Strait of Hormuz to commercial navigation, has collapsed completely.

The UAE has indefinitely frozen all trade with Iran, citing security risks, after Tehran's missiles hit Emirati waters.

The US President Donald Trump has threatened the imposition of tougher economic penalties on entities supporting Iranian economic activities, putting upward pressure on commodity prices.

“Oil prices extended their rally amid growing concerns over tighter US sanctions on Iran,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price rally was capped by a surprise rise in US crude stocks.

Commercial US crude oil inventories increased by 4.4 million bbls, to 429 million bbls in the week ending 14 August, according to data from the US Energy Information Administration (EIA).

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

The crude stocks build marked “a third consecutive weekly build and the highest level since May,” ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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