Americas Market Update 5 Oct

Fuel prices have mostly moved up across major ports in the Americas, and LSMGO availability is expected to tighten in New York.

IMAGE: Vessel docked in the Port of Houston in the US. Port of Houston

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

• VLSFO prices up in Los Angeles ($56/mt), Zona Comun ($43/mt), New York ($37/mt), Balboa ($26/mt) and Houston ($3/mt)
• LSMGO prices up in Zona Comun ($140/mt), New York ($134/mt) and Balboa ($100/mt), and down in Los Angeles ($17/mt) and Houston ($11/mt)
• HSFO prices up in New York ($54/mt) and Los Angeles ($43/mt), and down in Houston ($6/mt) and Balboa ($3/mt)

Houston's LSMGO price has declined over the past day. A lower-priced, 50-150 mt stem, fixed at $1,340/mt, potentially weighed the benchmark down.

Bunker demand in Houston is healthy, and all three conventional grades are available within 4-8 days. Demand is steady and the market is normal, a trader said.

Houston's LSMGO discount to New York has widened to $240/mt. New York has recorded price gains across all three conventional grades.

Recommended lead times at New York are at five days for VLSFO and seven days for HSFO, while LSMGO can be supplied within 3-4 days. LSMGO supply is expected to become strained at the port, tightening its availability, according to a source.

Brent

The front-month ICE Brent contract has gained $2.63/bbl on the day from Friday, trading at $101.92/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has opened the week above the $100/bbl mark, as more crude oil tankers came under missile and drone attacks within the Strait of Hormuz over the weekend.

At least four separate commercial vessels were struck by unknown projectiles since Friday, while attempting to transit the region, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

One oil tanker was stuck within the Strait of Hormuz yesterday, causing a fire in the engine room. Another vessel, about 4 nautical miles east of Oman, sustained damages on the port side on Saturday, the UKMTO reported.

“There’s still little sign of an end to tensions,” two analysts from ING Bank said. “We have seen an increase in attacks on commercial vessels in the Persian Gulf recently,” the analysts added.

Downward pressure:

Brent’s price has felt some downward pressure following news of the release of another tranche of emergency oil stocks, amidst supply concerns following disruption to Saudi oil deliveries.

The Group of Seven (G7) countries, and their partners, have agreed to collectively release up to 100 million bbls of emergency crude oil stocks over the next four months. The release will be coordinated by the International Energy Agency (IEA).

“Oil prices are under pressure amid plans for additional coordinated releases from strategic reserves,” ING Bank’s analysts said.

The announcement came shortly after the Washington issued another Request for Proposal (RFP) for an exchange of up to 40 million bbls of crude oil from its Strategic Petroleum Reserves (SPR) last week.

The latest G7 action “reflects the growing tightness” in the global oil market, ING Bank’s analysts added. 

By Gautamee Hazarika and Aparupa Mazumder

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