Americas Market Update 3 July

Fuel prices have moved in mixed directions, and fuel availability has improved at the Port of Los Angeles.

IMAGE: Cargo containers being offloaded in the Port of Los Angeles. Getty Images.

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

• VLSFO prices up in Zona Comun ($26/mt), Los Angeles ($9/mt) and Balboa ($2/mt) and down in New York ($5/mt)
• LSMGO prices up in Zona Comun ($39/mt), New York, Los Angeles ($22/mt), Houston ($20/mt) and Balboa ($19/mt)
• HSFO prices up in Los Angeles ($19/mt) and Balboa ($1/mt), and down in New York ($2/mt)

In Los Angeles, the port's HSFO price has increased by more than the port's VLSFO price. This has narrowed the port's Hi5 spread to $115/mt from $125/mt on Thursday.

On the West Coast, bunker demand has been normal in Los Angeles and Long Beach. Recommended lead times for VLSFO, LSMGO and HSFO are between 7-8 days. Availability has improved at the ports, a source has said.

In Latin America, fuel prices have increased the most for VLSFO and LSMGO in Zona Comun. Availability at the anchorage is good, with recommended lead times of 6-8 days.

High wind gusts are also forecast in Zona Comun until 5 July, where bunkering operations could be suspended if wind speeds exceed 20 knots.

Brent

The front-month ICE Brent contract has gained $0.92/bbl on the day, to trade at $71.58/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has traded higher once again, after Iran’s joint military command threatened ‘forceful response’ against commercial vessels in the Strait of Hormuz that fail to comply with its approved shipping routes.

The development comes after the US Central Command (CENTCOM) issued a statement pledging safe passage through the region, aligning its mission with its allies in the Middle East.

US CENTCOM commander Brad Cooper met with military officials from Bahrain, Kuwait, Saudi Arabia, and eight more Middle Eastern countries on Wednesday, to discuss vessel transit through the Strait of Hormuz.

The meeting has triggered the stark response from Iran, according to market analysts.

Downward pressure:

The resumption in commercial vessel transit through the Strait of Hormuz has largely capped Brent’s price gains today.

About 14 million bbls of crude oil has successfully passed through the critical waterway on Wednesday, ANZ Bank’s senior commodity strategist Daniel Hynes said, citing Bloomberg ship tracking data.

Meanwhile, a total of 43 commercial vessels crossed the Strait on the same day, according to maritime intelligence firm Windward.

Oil is under pressure “as crude flows through the Strait of Hormuz continue to improve,” Hynes said.

By Gautamee Hazarika and Aparupa Mazumder

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