Americas Market Update 7 Oct

Fuel prices have increased, and rough weather could suspend bunker operations in GOLA.

IMAGE: A group of tankers in port along the Houston Ship Channel, Texas. Getty Images

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

• VLSFO prices up in Los Angeles ($38/mt), Zona Comun ($35/mt), Houston ($34/mt), New York ($32/mt) and Balboa ($29/mt)
• LSMGO prices up in Zona Comun ($162/mt), New York ($64/mt), Balboa ($62/mt), Los Angeles ($39/mt) and Houston ($24/mt)
• HSFO prices up in New York ($35/mt), Balboa ($33/mt), Houston and Los Angeles ($27/mt)

Bunker prices have increased in major ports across the Americas over the past day, tracking Brent's gains.

Houston's LSMGO price has posted the smallest gain of the five ports for the grade. A lower-priced, 150-500 mt LSMGO stem was fixed at the port at $1,252/mt.

Demand in Houston is healthy, and all three conventional grades are available with lead times of 4-8 days, a trader said.

Rough weather is forecast in the Galveston Offshore Lightering Area (GOLA) and could disrupt bunker deliveries. High winds could suspend operations tomorrow, and high seas are likely to halt deliveries from the morning of 9 October through 10 October, a source said.

At the anchorage, HSFO and LSMGO can be delivered within 3-4 days, while VLSFO has required lead times of around five days over the past week.

Brent

The front-month ICE Brent contract has gained $4.20/bbl on the day, trading at $101.79/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has remained above $100/bbl as supply risks from the Persian Gulf continue to linger amid ongoing attacks on commercial vessels.

“Oil supplies from the Persian Gulf continue to improve. Yet the market is reluctant to get too carried away given that supply risks from the region remain elevated,” two analysts from ING Bank noted.

An oil tanker was struck by an unknown projectile within the Persian Gulf on Monday, while attempting an outbound transit, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“There is a clear tug-of-war at the moment between improving supply from the region and lingering threats to supply,” ING Bank’s analysts said.

Downward pressure:

Brent's gains were capped as Persian Gulf crude output showed signs of recovery, with regional operators adapting to the shifting geopolitical landscape.

Kuwait is reportedly producing at 75% of pre-war levels, Bloomberg reported, citing Kuwait Petroleum Corporation (KPC) chief executive Sheikh Nawaf Saud Al-Sabah.

Saudi Arabia has also reduced the official selling price (OSP) of the Arab Light to Asia for November loadings, Reuters reported.

“Iraq is hiring additional vessels to send oil through Hormuz”, a sign of an improving supply conditions, ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Gautamee Hazarika and Aparupa Mazumder

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