Americas Market Update 22 June

Fuel prices have moved downward, and bunker demand has picked up at the Port of Los Angeles.

IMAGE: Container ship traffic in Los Angeles' Pier 300 Channel. Port of Los Angeles.

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

• VLSFO prices down in Los Angeles ($58/mt), New York ($36/mt), Zona Comun ($34/mt), Houston ($18/mt) and Balboa ($7/mt)
• LSMGO prices down in Zona Comun ($63/mt), Houston ($47/mt), New York ($35/mt), Los Angeles ($29/mt) and Balboa ($23/mt)
• HSFO prices down in Houston ($19/mt), Balboa ($18/mt), New York ($17/mt) and Los Angeles ($12/mt)

Los Angeles' VLSFO price benchmark has declined the most for the grade amongst the key Americas ports, after a lower-priced 150-500 mt VLSFO stem, fixed at $694/mt, weighed on the benchmark.

The port's VLSFO benchmark nonetheless is at premiums of $83/mt to Houston and $80/mt to New York.

Conversely, the port's HSFO price has decreased by the smallest margin among the key ports. These price movements have narrowed the port's Hi5 spread to $146/mt today from $192/mt on Friday.

On the US West Coast, bunker demand has picked up, and fuel availability is normal across all three conventional grades at the ports of Los Angeles, a trader said.

Recommended lead times for HSFO, VLSFO and LSMGO are currently 7–10 days.

Brent

The front-month ICE Brent contract has lost by $0.25/bbl on the day from Friday, trading at $78.68/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure amid weekend reports of renewed hostilities, casting doubt on the US-Iran peace accord.

The Israel Defense Forces (IDF) struck targets in southern Lebanon over the weekend, breaching a key provision of the peace deal signed in France last week.

“Oil prices have moved higher this morning as the US-Iran ceasefire gets off to a rocky start,” two analysts from ING Bank noted.

Shortly after the IDF strikes, Tehran announced it had again closed the Strait of Hormuz to commercial vessels as Israel continued to attack Lebanon.

“For energy markets, the key factor is still whether oil and LNG flows from the Persian Gulf continue to recover, despite all the rhetoric,” the analysts said.

Downward pressure:

Talks between high-ranking officials from Washington and Tehran went well in Switzerland earlier today, according to reports.

Both countries have agreed to finalising a peace deal within the next 60 days that will end hostilities in Lebanon and reopen the Strait of Hormuz to commercial vessel traffic.

The talks, initially scheduled for Friday, were delayed until Sunday. It took place shortly after Israel launched drones on targets in Southern Lebanon.

“The US-Iran deal marks an inflection point for oil markets,” ANZ Bank’s senior commodity strategist Daniel Hynes noted. “Crude oil prices are expected to remain under pressure as supply through the Strait of Hormuz recovers,” he added.

By Gautamee Hazarika and Aparupa Mazumder

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