Americas Market Update 1 May

Bunker prices have largely moved down in Americas ports, and availability looks better for certain suppliers in Balboa than in Cristobal.

IMAGE: Port of Balboa at Panama's Pacific Ocean side. Getty Images

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

• VLSFO prices up in Los Angeles ($12/mt), and down in Houston ($34/mt), Zona Comun ($28/mt), Balboa ($12/mt) and New York ($10/mt)
• LSMGO prices down in Balboa ($39/mt), Houston ($25/mt), New York ($24/mt), Zona Comun ($5/mt) and Los Angeles ($2/mt)
• HSFO prices up in Los Angeles ($28/mt), and down in New York ($18/mt), Balboa ($13/mt) and Houston ($5/mt)

Los Angeles' VLSFO and HSFO prices have gained and moved against the general market direction. Suppliers in the port have indicated slightly above where yesterday’s benchmark prices stood.

Prices for all three conventional grades have dropped amid declining Brent levels in other major Americas ports.

Balboa’s LSMGO has made the biggest daily drop among these ports, and the grade has been offered at $1,475/mt today.

One Panama supplier’s earliest delivery date for VLSFO and LSMGO is about 10 days out, while another can deliver in two days in Balboa and in 11-12 days in Cristobal.

Prompt HSFO and LSMGO deliveries are possible in New Orleans, while lead times vary between suppliers in Bolivar Roads. One Bolivar Roads supplier can deliver VLSFO and LSMGO in 3-4 days, another in 6-7 days and yet another in about five days.

There is rough weather and potential disruptions forecast in several locations. Bunkering is suspended in the Galveston Offshore Lightering Area (GOLA), with high winds and seas forecast until tomorrow.

Strong winds forecast in the Bahamas and Zona Comun from tomorrow until Monday could disrupt bunkering in those areas.

Brent

The front-month ICE Brent contract has shed $3.32/bbl on the day, to trade at $110.66/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Oil market participants continue to remain concerned that the ongoing closure of the Strait of Hormuz will extend production cuts by Persian Gulf producers.

Yesterday, Iran’s new Supreme Leader Mojtaba Khamenei vowed not to give up the country’s nuclear assets and missile technologies, according to media reports. The news has put some upward pressure on Brent’s price today.

“He [Khamenei] also signalled that Iran will keep control of the Strait of Hormuz,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Despite today’s decline in price, Brent crude is poised to close the week above $110/bbl mark, as analysts see no immediate ceasefire deal on the table.

“There are concerns that the US is preparing for renewed hostilities,” Hynes said.

Downward pressure:

The front-month ICE Brent contract has changed from June to July, which goes a long way to explain the past day's drop in price.

While the June contract was trading around $120/bbl yesterday, the July contract is near $111/bbl, accounting for much of the roughly $9/bbl decline seen in the previous session.

Dated Brent, the benchmark for the spot physical market eased below $123/bbl, while front-month futures fell to $111/bbl ahead of the expiry of the June contract, according to Hynes.

“The gap between the paper and physical markets is narrowing as tightness begins to materialise for the first time since the conflict began,” Hynes added.

By Erik Hoffmann and Aparupa Mazumder

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