Americas Market Update 3 Dec
Prices have moved in mixed directions, and New York has reported weak demand for LSMGO so far this week.
IMAGE: Container ship traffic in Los Angeles' Pier 300 Channel. Port of Los Angeles
Changes on the day to 07.00 CST (13.00 GMT) today:
- VLSFO prices up in Balboa ($5/mt), Houston, Zona Comun ($3/mt), and Los Angeles ($1/mt), and down in New York ($2/mt)
- LSMGO prices up in Zona Comun ($7/mt), New York and Los Angeles ($1/mt), and down in Houston ($3/mt) and Balboa ($2/mt)
- HSFO prices up in Balboa ($4/mt), New York and Los Angeles ($1/mt), and down in Houston ($3/mt)
Zona Comun's LSMGO price has recorded the highest gains among all grades and is currently at a small premium of $9/mt to nearby bunkering spot, Buenos Aires.
Weather conditions continue to be normal at the anchorage, with winds blowing between 12–16 knots. However, bunkering operations may be suspended between 6–8 December, as the anchorage is expecting high wind gusts of over 20 knots.
The port of Los Angeles has recorded gains across all three conventional fuel grades. Demand at the port is steady, and suppliers recommend 5–7 days of lead time.
In New York, demand for LSMGO has weakened this week, while VLSFO and HSFO continue to hold steady demand, a source told ENGINE.
Meanwhile, Houston's LSMGO price has declined after a lower-priced 50–150 mt stem was fixed at $664/mt, putting downward pressure on the benchmark.
Lead times in the Houston-Galveston area are currently higher than usual and delays due to the ongoing fog season are expected, a bunker trader said.
Brent
The front-month ICE Brent contract has gained $0.09/bbl on the day, to trade at $63.16/bbl at 07.00 CST (13.00 GMT) today.
Upward pressure:
Oil prices have been buoyed by ongoing US–Venezuela tensions.
Trump said over the weekend that the airspace above and around Venezuela should be treated as closed, injecting fresh uncertainty into the oil market given the country’s role as a major producer, according to Reuters.
“Geopolitical risks are also rising around potential US military action in Venezuela that could threaten the latter’s oil production,” added ANZ Bank senior commodity strategist Daniel Hynes.
On Sunday, OPEC+ reaffirmed a small output increase for December and paused further hikes in the first quarter of next year amid rising concerns about a supply glut. The move remains supportive for oil prices in the near term.
US crude inventories fell by 2.48 million bbls in the week ending 28 November, marking “the second straight weekly decline in inventories,” according to American Petroleum Institute (API) estimates cited by Trading Economics.
A drop in US crude stocks typically signals stronger demand and can lend support to Brent. The official Energy Information Administration (EIA) data will be released later today.
Downward pressure:
Uncertainty surrounding Russia–Ukraine peace talks has put pressure on Brent futures.
Russian President Vladimir Putin met US President Donald Trump’s special envoy Steve Witkoff and son-in-law Jared Kushner in the Kremlin on Tuesday, but just before the meeting he warned European powers that if they initiated a war with Russia, Moscow was prepared to fight. Putin also threatened to cut off Ukraine’s access to the sea in response to drone attacks on tankers in Russia’s “shadow fleet” in the Black Sea, according to Reuters.
“Oil prices traded lower yesterday as the US and Russia held talks on Ukraine,” said two analysts from ING Bank.
“Crude oil finished lower following a choppy session, as geopolitical tensions roiled the market,” added ANZ Bank’s Daniel Hynes.
By Gautamee Hazarika and Tuhin Roy
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