Americas Market Update 29 Sep

Prices for all conventional grades have declined at major ports in the Americas, and Hurricane Polo has made landfall on Mexico's Pacific coast.

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 down in New York ($48/mt), Los Angeles ($43/mt), Zona Comun ($30/mt), Houston ($28/mt) and Balboa ($11/mt)
• LSMGO prices down in Houston ($120/mt), New York ($96/mt), Los Angeles ($82/mt) and Balboa ($53/mt)
• HSFO prices down in Los Angeles ($30/mt), Balboa ($26/mt), Houston and New York ($25/mt)

Brent's decline has weighed on benchmark prices across the Americas.

Balboa's VLSFO price has declined over the past day. A lower-priced, 500-1,500 mt stem, fixed at $725/mt, may have weighed on the benchmark.

Balboa's VLSFO is at discounts of $59/mt to New York and $14/mt to Houston.

Bunker demand at Panama's Balboa and Cristobal has been steady this week, with VLSFO drawing more interest than HSFO and LSMGO, a trader said.

Availability of all three conventional grades is good, with VLSFO and LSMGO deliverable within 3-4 days, while HSFO requiring 5-7 days of lead time, a source said.

The US National Hurricane Center has issued advisories for Hurricane Polo, which has made landfall on Mexico's Pacific coast, and for Tropical Storm Rachel in the Eastern Pacific.

Brent

The front-month ICE Brent contract has lost $3.27/bbl on the day, trading at $103.15/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has continued to trade above the $105/bbl mark after US President Donald Trump rejected Iran’s peace proposal to reopen the Strait of Hormuz.

“Oil began the session firmer after President Donald Trump rejected Iran’s 7-day proposal,” SPI Asset Management managing partner Stephen Innes wrote.

Subsequently, Iran’s foreign minister Abbas Araghchi said that his country is prepared to reopen the Strait of Hormuz, only if Washington accepts Tehran’s seven-day peace framework.

The latest developments solidify expectations of an extended conflict in the Middle East – enforcing the ongoing bottlenecks for commercial shipping in the Strait of Hormuz.

“[Oil] traders are not pricing an imminent diplomatic breakthrough, but neither are they pricing a permanent closure of the Strait. We remain somewhere in the uncomfortable middle,” Innes said.

Downward pressure:

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 22 September.

Speculators sold a little more than 64,500 lots as of 22 September, decreasing net-long positions in Brent futures to over 218,000 lots.

When speculators reduce net-long positions, oil prices tend to decline. Conversely, when they boost these positions, prices typically rise, leading to a cycle where their actions can influence oil prices and the market.  

By Gautamee Hazarika and Aparupa Mazumder

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