Americas Market Update 30 Jan

Bunker fuel prices have moved in mixed directions, and prolonged delays are expected in Freeport over the weekend due to high wind gusts.

IMAGE: Container ship docked in the Port of Balboa. Getty Images

Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Los Angeles and Balboa ($3/mt), and down in New York, Zona Comun ($5/mt) and Houston ($2/mt)
• LSMGO prices up in Los Angeles ($18/mt), Zona Comun ($7/mt), New York and Balboa ($2/mt), and unchanged in Houston
• HSFO prices up in Los Angeles ($3/mt) and Balboa ($2/mt), and down in Houston ($4/mt) and New York ($1/mt)

Houston's VLSFO price has declined in the past day after a 150–500 mt VLSFO stem was booked in the port at $448/mt, putting downward pressure on the benchmark.

Bunker fuel demand in Houston is normal, and recommended lead times for all three conventional fuel grades have remained unchanged from last week at 6–10 days.

Bunker demand has seen a mild uptick in the ports of Los Angeles and Long Beach. Availability is normal, with most suppliers able to deliver all three fuel grades within 6–7 days.

LSMGO has jumped $18/mt higher in Los Angeles, while VLSFO and HSFO have made minimal $3/mt gains to keep the port’s Hi5 spread steady at $96/mt.

Balboa's HSFO price has made a similar small gain as in Los Angeles. HSFO availability is tight in Panama this week and the grade requires a notice of 6–9 days ahead, a source said.

Prolonged bunker delivery delays are likely in the Bahamas' Freeport, where high wind gusts are forecast from 31 January to 2 February, a trader said.

Brent

The front-month ICE Brent contract has gained by $0.49/bbl on the day, to trade at $70.43/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent’s price has continued to draw some support as tensions build between the US and Iran amid US President Donald Trump's threats to attack the OPEC nation.

The oil market is becoming “increasingly nervous” over potential US strikes if Iran does not make a deal regarding its nuclear ambitions, two analysts from ING Bank noted.

Iran produces about 3.2 million b/d of crude oil, so any escalation could potentially disrupt supply from the Middle Eastern region, according to market analysts.

“Iran accounts for about 3% of global supply. It’s clear that the market is now pricing in a geopolitical risk premium amid the risks to supply disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price has come under downward pressure on some easing supply concerns.

Earlier this week, Kazakhstan’s pipeline operator Caspian Pipeline Consortium (CPC) said full loading operations have resumed at its Black Sea terminal, after maintenance was completed on one of three mooring points.

Loadings were previously suspended after the mooring points were damaged in a Ukrainian drone strike.

“With this repair work complete, loadings should normalise, helping to ease some of the tightness,” ING Bank analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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