Americas Market Update 25 June

Fuel prices have moved in mixed directions, and operations in Zona Comun have been suspended for a second time this week due to high wind gusts.

IMAGE: An LPG tanker sailing along the Houston Ship Channel on the way to Galveston Bay. Getty Images.

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

• VLSFO prices up in New York ($9/mt), and down in Zona Comun ($16/mt), Los Angeles ($11/mt), Balboa ($9/mt) and Houston ($8/mt)
• LSMGO prices up in Balboa and Zona Comun ($3/mt), unchanged in New York, and down in Los Angeles ($12/mt) and Houston ($1/mt)
• HSFO prices up in Los Angeles ($6/mt), and down in Houston, New York ($3/mt) and Balboa ($2/mt)

Houston's VLSFO price benchmark has declined after two lower-priced 500-1,500 mt VLSFO stems, fixed between $581-$585/mt, pushed the benchmark down.

Bunker demand in the port of Houston has eased compared to the past few weeks. VLSFO demand has seen the sharpest decline, a trader tells ENGINE. Recommended lead times for VLSFO and HSFO are 6-7 days, while LSMGO requires 4-5 days this week.

Operations at the Zona Comun anchorage have again been suspended today due to high wind gusts exceeding 20 knots in the region.

This is the second suspension the anchorage has faced this week, after operations were suspended on Tuesday.

Availability of VLSFO and LSMGO is steady at the anchorage, where both grades are supplied by barge. Lead times are 5-7 days this week.

Brent

The front-month ICE Brent contract has lost $1.49/bbl on the day, to trade at $72.86/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent price has felt some upward pressure after US Energy Information Administration (EIA) reported a big draw in US crude stocks.

Commercial US crude oil inventories decreased by 6.1 million bbls to 412.1 million bbls in the week ending 19 June, according to data from the EIA.

The American Petroleum Institute (API) reported a comparatively smaller decline of 765,000 bbls in crude stocks during the same week.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

“[Inventory] levels are so low at Cushing, the main storage hub in the US, that traders are concerned that some companies will be forced to take tanks out of service due to risks of collapse,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

Downward pressure:

Brent crude’s price has continued to slide lower as the ongoing US and Iran negotiations pointed to further easing of tensions in the Middle East. 

Signs of progress in the talks, the resumption of tanker movement across the Gulf and a two-month US sanctions waiver, have collectively erased the conflict-driven price surge seen earlier in March.

“Brent has dropped roughly 8% over the past week as the market begins to price a far quicker reopening of Middle East supply than anyone would have dared expect at the height of the Hormuz shock,” according to SPI Asset Management managing partner Stephen Innes.

On Wednesday, two supertankers and one LNG tanker exited the Strait of Hormuz, heading for India and China, Reuters reported, citing data from ‌LSEG and Kpler.

“The increased movement of ships through the Strait of Hormuz is also providing some hope that the worst of the supply disruptions are behind us,” Hynes said.

By Gautamee Hazarika and Aparupa Mazumder

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