Americas Market Update 23 Feb

Fuel prices have moved in mixed directions, while strong wind gusts in New York could disrupt bunkering operations today.

IMAGE: Cranes loading a container ship at a marine terminal in New York. Getty Images.

Changes on the day from Friday to 09.00 GMT today:

• VLSFO prices up in Houston ($5/mt), unchanged in Balboa, and down in Zona Comun ($7/mt) and New York ($2/mt)
• LSMGO prices up in Houston ($8/mt), Balboa and Zona Comun ($3/mt), and down in New York ($7/mt)
• HSFO prices up in Houston ($3/mt), unchanged in Balboa, and down in New York ($4/mt)

Houston's LSMGO price has risen the most across all ports and grades, supported by a higher-priced 50–150 mt stem booked at the port over the weekend at $729/mt.

Availability of VLSFO and HSFO is tight for prompt delivery, requiring lead times of at least 7–10 days. LSMGO availability is comparatively better, with most suppliers able to deliver within 5–7 days.

Disruptions due to the seasonal fog have continued at the port.

In New York, bunkering operations may face disruptions today due to high wind gusts of up to 45 knots and waves of 3–5 feet, occasionally reaching up to 6 feet, a source said.

The East Coast bunker hub has recorded price declines across all three fuel grades in the past session. The port's Hi5 spread stands at $124/mt today.

HSFO availability is tight in New York and requires 7–9 days to secure supply, a trader said. VLSFO requires 5–6 days of lead time, while LSMGO has good availability and can be delivered within 2–3 days.

Brent

The front-month ICE Brent contract has declined by $0.36/bbl on the day from Friday, to trade at $71.08/bbl at 09.00 GMT.

Upward pressure:

Brent has found some support after official data from Baker Hughes showed that the US oil rig count was unchanged at 409 in the week ending 20 February.

The rig tally is widely regarded as a forward-looking gauge of US crude output, offering insight into current and anticipated drilling activity in the shale patch.

In a market where supply remains constrained, indications of softer future production can lend upward support to Brent futures.

Downward pressure:

Brent crude’s price has moved lower as market participants focused on renewed possibilities of a negotiation between Washington and Tehran.

The US and Iran are preparing for another round of discussion about the latter’s nuclear enrichment capabilities, Reuters reported. Representatives from both nations will sit for a third round of nuclear talks on Thursday in Geneva, the report added.

“Oil prices are under pressure… with further US-Iran talks scheduled,” according to two analysts from ING Bank.

The news has eased some fears of supply disruption in the oil-rich region, according to market analysts.  

“[Oil] prices are trading softer… with further talks between the US and Iran planned for Thursday, while Iran’s foreign minister said that there is a chance for a diplomatic solution,” ING Bank’s analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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