Americas Market Update 27 Jan

Bunker fuel prices across the Americas have moved in mixed directions, and major delays are expected at GOLA this week.

IMAGE: A container ship setting sail from the Port of Houston at Morgan's Point. Getty Images

Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in New York ($5/mt) and Los Angeles ($2/mt), and down in Zona Comun ($20/mt), Houston and Balboa ($5/mt)
• LSMGO prices up in Houston, New York ($13/mt) and Los Angeles ($8/mt), and down in Balboa, Zona Comun ($17/mt)
• HSFO prices up in Los Angeles ($7/mt), New York ($6/mt) and Houston ($2/mt), and down in Balboa ($6/mt)

The price of LSMGO at Houston and New York recorded the steepest gains over the past session.

Bunker demand in Houston is steady, with advised lead times for all three conventional grades at 6–10 days. The port is a key bunkering hub on the US Gulf Coast and is affected by the region’s annual fog season.

In the Galveston Offshore Lightering Area (GOLA), operations are currently suspended due to high winds and high seas.

Major delays are expected at the anchorage location due to prolonged weather-related suspensions and delays in accessing Houston for reloading, a bunker trader told ENGINE.

At the West Coast port of Los Angeles, the price of HSFO rose by $7/mt, while VLSFO rose by $2/mt, narrowing the Hi5 spread to $90/mt.

Availability across all fuel grades is normal in Los Angeles and Long Beach, with suppliers recommending lead times of 5–7 days.

Brent

The front-month ICE Brent contract has lost by $0.17/bbl on the day, to trade at $65.60/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude has felt some upward pressure as harsh winter weather in the US has disrupted production across major crude-producing regions.

US crude oil output has fallen by as much as 250,000 b/d due to severe weather conditions, Reuters reported.

“A winter storm in the US is likely to spur increased heating demand amid snow, ice and freezing temperatures,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Harsh weather conditions are also “raising concerns about disruptions to energy supply,” with US refineries struggling to operate in full force, according to Hynes.

Downward pressure:

Brent’s price has moved lower following news that the Chevron-led consortium operating Kazakhstan’s Tengiz oilfield has resumed production after last week’s fire.

The fire that damaged a power generation and distribution facility on 18 January forced a temporary shutdown of the oilfield.  

The oilfield is operated by a consortium led by US-headquartered Chevron, which holds a 50% stake, alongside ExxonMobil with 25%, Kazakhstan’s state oil company KazMunayGaz with 20%, and Russia’s Lukoil with 5%.

The oilfield “accounts for most of Kazakhstan’s exports,” Hynes added.

By Gautamee Hazarika and Aparupa Mazumder

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