Americas Market Update 28 Oct

Fuel prices have moved in mixed directions, and strong wind gusts have disrupted deliveries in Freeport in the Bahamas.

IMAGE: A fully loaded container ship heading toward the Port of Houston. Getty Images

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

• VLSFO prices up in Zona Comun ($22/mt) and New York ($6/mt), unchanged in Los Angeles, and down in Houston ($6/mt) and Balboa ($2/mt)
• LSMGO prices up in New York ($25/mt) and Houston ($18/mt), and down in Balboa ($19/mt) and Los Angeles ($6/mt)
• HSFO prices up in New York ($15/mt), and down in Balboa ($13/mt), Los Angeles ($6/mt) and Houston ($4/mt)

Houston’s VLSFO price has declined over the past day. Two lower-priced, 150-500 mt and 500-1,500 mt stems, fixed at $802/mt and $820/mt respectively, may have potentially weighed on the benchmark.

Meanwhile, the port’s LSMGO price has increased. A mildly higher-priced, 50-150 mt stem, fixed at $1,430/mt, may have pushed the benchmark up.

Bunker demand has been strong at the US Gulf port, despite HSFO, VLSFO and LSMGO availability being tight, a source said. Lead times of 5-8 days are recommended.

High wind gusts have disrupted bunkering activities and could halt deliveries at the anchorage off Freeport in the Bahamas today, a source said.

Brent

The front-month ICE Brent contract has gained $0.02/bbl on the day, trading at $114.89/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has found support after Yemen’s Houthi militants claimed an attack on one of the biggest oil refineries in Saudi Arabia and US crude stocks declined.

The Iran-aligned Houthis claimed to hit the 550,000 b/d Ras Tanura refinery complex with a ballistic missile. Saudi Arabian authorities have not confirmed the strike.

Besides, US crude oil inventories fell by 2.03 million bbls in the week ending 23 October, according to estimates from the American Petroleum Institute (API).

A decline in US crude stocks usually signals stronger demand and can offer some support to Brent’s price.

Brent futures' gains in recent weeks suggest the market is pricing in “a greater likelihood of re-escalation,” two analysts from ING Bank said.

Downward pressure:

Brent’s price has come under some downward pressure amid fresh diplomatic efforts to end the Middle East conflict.

Qatari mediators presented Iran with a new draft deal to end the war, and Tehran is expected to respond by the end of this week, Reuters reported, citing an official briefed on the negotiations.

The draft deal sets a seven-day timeline of daily confidence-building steps for both sides, the report added.

If the market gets past the US midterm elections on 3 November without renewed strikes on Iran, its risk premium could start to erode, ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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