Americas Market Update 30 June

Fuel prices have mostly moved upwards, and bunkering operations in Zona Comun are likely to be suspended tomorrow early morning.

IMAGE: Cranes and shipping containers at a port in Argentina. Getty Images.

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

• VLSFO prices up in Houston ($23/mt), Los Angeles ($19/mt), Balboa ($12/mt), Zona Comun ($11/mt) and New York ($10/mt)
• LSMGO prices up in New York ($49/mt), Los Angeles ($29/mt), Balboa ($20/mt), Houston ($12/mt) and Zona Comun ($10/mt)
• HSFO prices up in Los Angeles ($33/mt), Balboa ($16/mt) and New York ($4/mt), and unchanged in Houston

Houston's VLSFO price has increased the most for the grade, after a higher-priced 500-1,500 mt VLSFO stem, fixed at $628/mt, put upward pressure on the benchmark.

The port's HSFO price has remained unchanged over the past day. These price movements have widened Houston's Hi5 spread to $106/mt today from $83/mt on Monday.

New York's LSMGO price has increased the most across all three fuel grades and the key ports in the Americas. The benchmark is currently at premiums of $142/mt to Houston and $18/mt to Los Angeles.

Fuel availability in New York has improved. VLSFO and HSFO require lead times of 5-6 days, and LSMGO can be delivered within 2-3 days.

In Zona Comun, bunkering operations are expected to be suspended early Wednesday morning due to dense fog and strong winds near the anchorage, a trader said.

Brent

The front-month ICE Brent contract has gained $0.77/bbl on the day, to trade at $73.30/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has traded higher this week, as crude oil movement through the Strait of Hormuz faced some constraints after Iran struck two commercial vessels with drones over the weekend.

The Panama-flagged oil tanker M/T Kiku, and the Singapore-registered container ship Ever Lovely, came under attack after Iran’s navy issued a warning to commercial vessels last week, cautioning them against using unauthorised routes to transit the strait.

“Crude oil prices gained as renewed fighting in the Middle East raised concerns about the sustainability of oil supplies flowing through the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

In response to these vessel attacks, the US Central Command (CENTCOM) launched strikes on Iranian military targets, including air defense sites and surveillance infrastructure. 

“Traffic through the Strait remains well below last week's post-war peak,” VANDA Insights’ founder Vandana Hari commented.

Downward pressure:

Brent’s price has felt some downward pressure from the latest positions data, as money managers and hedge funds decreased their net-long bets on ICE Brent futures over the last reporting week.

Speculators sold more than 23,000 lots as of 23 June, decreasing net-long positions in Brent futures to a little over 90,000 lots, according to futures and options data from ICE Futures Europe.

When speculators reduce net-long positions, prices tend to decline. Conversely, when they boost these positions, oil 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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