Americas Market Update 3 June

Fuel prices have moved in mixed directions, and high wind gusts could lead to bunker delays off Trinidad.

IMAGE: Corpus Christi Bay featuring the city skyline and marina. Getty Images.

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

• VLSFO prices up in Zona Comun ($37/mt), Houston ($36/mt), Los Angeles ($25/mt) and New York ($16/mt), and down in Balboa ($69/mt)
• LSMGO prices up in Houston, Zona Comun ($66/mt), New York ($41/mt), Balboa ($20/mt) and Los Angeles ($1/mt)
• HSFO prices up in Balboa ($29/mt), New York ($23/mt), Los Angeles ($11/mt) and Houston ($7/mt)

Despite Brent's upward movement, Balboa's VLSFO price has slumped after a lower-priced 500-1,500 mt stem, fixed at $783/mt, exerted downward pressure on the benchmark.

The port's VLSFO price decline has narrowed the port's Hi5 spread to $38/mt today, from $136/mt yesterday.

Conversely, Houston's VLSFO price has increased after a higher-priced 150-500 mt stem, fixed at $802/mt, pushed the benchmark up.

The port's VLSFO is currently at discounts of $161/mt to Los Angeles and $2/mt to New York.

Off Trinidad, bunker operations are expected to face delays until tomorrow due to high wind gusts and elevated sea conditions, a source said.

Brent

The front-month ICE Brent contract has gained by $3.68/bbl on the day, trading at $97.98/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent's price has risen as renewed hostilities in the Middle East and a lack of progress in talks between Tehran and Washington continue to support the market

Iran launched ballistic missiles towards neighbours Kuwait and Bahrain, while US forces carried out strikes on Iran's Qeshm Island, Reuters reported.

“US, Iran exchange missile and drone strikes in Persian Gulf,” remarked VANDA Insights founder Vandana Hari.

Market sentiment is also buoyed by concerns that diplomatic efforts between the two countries are faltering.

“Crude oil edged higher as peace talks between the US and Iran struggled to stay on track,” ANZ Bank senior commodity strategist Daniel Hynes noted.

Meanwhile, US crude oil inventories fell by a larger-than-anticipated 6.8 million bbls in the week ending 29 May, according to estimates from the American Petroleum Institute (API) cited by Trading Economics.

The decline was significantly steeper than analysts’ expectations for a 3.6 million-bbl draw. Lower US crude inventories can signal stronger demand and may provide additional upward support to Brent futures.

Downward pressure:

Despite the lack of any meaningful breakthrough in US-Iran talks, market participants continue to closely monitor the negotiations for signs of progress, a factor that has exerted some downward pressure on Brent's price.

By Gautamee Hazarika and Tuhin Roy

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