Americas Market Update 7 Aug

Fuel prices have moved in mixed directions, and availability has improved in Los Angeles this week.

IMAGES: Container ship crossing over the Miraflores locks in the Panama Canal. Getty Images

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

• VLSFO prices up in New York ($9/mt) and Zona Comun ($4/mt), and down in Los Angeles ($19/mt), Balboa ($12/mt) and Houston ($4/mt)
• LSMGO prices up in Zona Comun ($33/mt), New York ($20/mt) and Balboa ($10/mt), unchanged in Houston, and down in Los Angeles ($54/mt)
• HSFO prices up in Houston ($7/mt), New York and Balboa ($4/mt), and down in Los Angeles ($10/mt)

Los Angeles' LSMGO price has decreased after a lower-priced 50-150 mt stem was fixed at $1,250/mt, weighing on the benchmark.

The port's VLSFO price has decreased after a lower-priced 500-1,500 mt stem was fixed at $839/mt, putting downward pressure on the benchmark.

Bunker demand has been strong in the US West Coast ports of Los Angeles and Long Beach. Availability has improved over the past few weeks, with most suppliers able to deliver all three conventional fuel grades within 6-7 days, a trader said.

In Balboa, HSFO's price has increased while VLSFO's price has decreased over the past day, narrowing the Hi5 spread to $117/mt today, from $133/mt yesterday.

Recommended lead times for VLSFO and LSMGO are at 4-6 days in Balboa. HSFO requires at least five days, a source said.

Brent

The front-month ICE Brent contract has gained $0.82/bbl on the day, to trade at $81.62/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent has climbed back above the $80/bbl threshold as Iran and Oman delay finalising a joint agreement to reopen the Strait of Hormuz to commercial shipping.

Tehran’s parliament is ​reviewing the agreement, which will allegedly bar US, Israeli and ​other “hostile” vessels from ​transiting the strait, and impose ​fees of up ​to 20% of a ship’s ‌cargo ⁠value.

Iran wants to charge “service fees rather than a toll,” two analysts from ING Bank noted. “There doesn’t seem to be much of a compromise, which ultimately makes it more difficult to reach a sustainable deal,” they said.

There is also little news of progress made in the ongoing US-Iran negotiations, even as President Donald Trump and other senior US officials claim Washington is close to a ceasefire deal.

“Oil prices are seeing renewed strength amid additional signs that a US-Iran deal remains difficult to achieve,” ING Bank’s analysts added.

Downward pressure:

While there are few active downward pressures on Brent’s price today, market participants are tracking the ongoing Oman-mediated talks between Washington and Tehran.

Moreover, market analysts said if the Iran-Oman agreement to reopen the Strait of Hormuz is finalised, it could ease some pressure on the world economy.

The agreement is in its “final stage,” the Associated Press reported earlier.

By Gautamee Hazarika and Aparupa Mazumder

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