Americas Market Update 28 May

Fuel prices have moved in mixed directions, and prompt fuel availability is tight at the port of Los Angeles.

IMAGE: The Statue of Liberty seen from New York Harbor. Getty Images

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

• VLSFO prices up in Los Angeles ($36/mt), Balboa ($11/mt) and Zona Comun ($7/mt), and down in Houston ($19/mt) and New York ($8/mt)
• LSMGO prices up in Zona Comun ($14/mt) and Los Angeles ($4/mt), and down in Balboa ($37/mt), New York ($30/mt) and Houston ($19/mt)
• HSFO prices up in Los Angeles ($26/mt) and New York ($2/mt), and down in Balboa ($50/mt) and Houston ($8/mt)

Balboa's HSFO price benchmark has dipped the most across all three fuel grades and ports, after a lower-priced 500-1,500 mt HSFO stem, fixed at $727/mt, exerted downward pressure.

The port's VLSFO price has meanwhile increased, widening the port's Hi5 spread to $97/mt today from $36/mt yesterday.

On the US West Coast, the port of Los Angeles has recorded price gains across all three fuel grades. The port's VLSFO price benchmark is currently at premiums of $217/mt to Houston and $170/mt to New York.

At the ports of Los Angeles and Long Beach, bunker demand has remained strong, and availability has been a bit tight for prompt supply.

Suppliers have recommended lead times of 7-10 days for HSFO and LSMGO. VLSFO requires lead times of just under a week, a source said.

Brent

The front-month ICE Brent contract has increased by $0.42/bbl on the day, trading at $95.75/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Oil prices moved higher after the US military launched fresh strikes in Iran, targeting a military site that officials believed posed a threat to US forces and commercial maritime traffic in the Strait of Hormuz, according to Reuters citing a US official.

“Crude ticks higher as US strikes Iran again,” remarked VANDA Insights founder Vandana Hari.

Iran's Revolutionary Guards said they had targeted a US airbase in response to a US attack in the port city of Bandar Abbas, Reuters reported.

The latest flare-up in the Middle East has added further upward pressure on Brent futures.

Meanwhile, US crude oil inventories fell by 2.8 million bbls in the week ending 22 May, according to estimates from the American Petroleum Institute (API) cited by Trading Economics.

A draw in US crude stocks could signal stronger oil demand and lend additional support to Brent prices.

Downward pressure:

Market focus shifted from concerns over escalating Middle East hostilities to optimism surrounding a potential US-Iran peace deal, putting some downward pressure on oil prices.

“Crude oil prices sold off, as markets became increasingly convinced that a US-Iran deal was imminent,” said ANZ Bank senior commodity strategist Daniel Hynes.

By Gautamee Hazarika and Tuhin Roy

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