Americas Market Update 24 Feb

Fuel prices have mostly moved higher, and bunkering delays are expected at GOLA from tomorrow due to high wind gusts.

IMAGE: An LPG tanker sailing west along the Houston Ship Channel. Getty Images.

Changes on the day to 09.00 GMT today:

• VLSFO prices up in Houston ($25/mt), Zona Comun ($14/mt), New York ($8/mt) and Balboa ($7/mt)
• LSMGO prices up in Balboa ($31/mt), New York ($15/mt), Zona Comun ($13/mt) and Houston ($6/mt)
• HSFO prices up in Houston ($10/mt) and New York ($8/mt), and unchanged in Balboa

Balboa's LSMGO price has gained by the highest measure across all ports and grades in the past day.

Availability remains normal in Balboa, with suppliers recommending 3-5 days for all conventional grades. The port's Hi5 spread has widened to $112/mt today, marking a recovery from $70/mt a year ago.

The US Gulf continues to face seasonal fog.

In the Galveston Offshore Lightering Area, possible disruptions are expected between 25-27 February due to high wind gusts, a trader tells ENGINE.

Houston, New York, and Zona Comun have recorded price increases across all grades.

With a $13/mt increase in Zona Comun's LSMGO price, it is currently at premiums of $23/mt to Buenos Aires and $19/mt to Bahia Blanca.

Lead times for VLSFO and LSMGO at the anchorage currently stand at 7–10 days.

 Brent

The front-month ICE Brent contract has gained by $0.52/bbl on the day, to trade at $71.60/bbl at 09.00 GMT.

Upward pressure:

Brent crude’s price has moved higher, with market participants laser-focused on further developments in Iran – the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

Over the weekend, US President Donald Trump affirmed “over the next, probably, 10 days,” Washington will reach a deal with Tehran or take military action against it.

“Uncertainty over potential US action in Iran builds, with the US continuing to move military assets into the region and US President Donald Trump giving Iran a deadline to come to a nuclear deal,” two analysts from ING Bank said.

Meanwhile, the Indian Directorate General of Shipping (DGS) issued a strong advisory to all Indian seafarers and shipping companies to avoid Iranian territorial waters while transiting the Strait of Hormuz.

“The Strait of Hormuz continues to serve as the world’s most critical energy chokepoint,” Price Futures Group’s senior market analyst Phil Flynn said.

Downward pressure:

While there are no significant downward pressures on Brent’s price today, market participants will keep an eye on renewed possibilities of a negotiation between the US and Iran, as they prepare for a third round of negotiations later this week.

“In the case of a [Iran-US] deal, we would see a fairly aggressive erosion of the risk premium currently priced into the market – although reaching a deal is easier said than done,” ING Bank’s analysts added.

Representatives from both countries will meet for another round of discussion about the Iran’s nuclear ambitions, on Thursday in Geneva, Switzerland.

By Gautamee Hazarika and Aparupa Mazumder

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