Americas Market Update 10 Jun

Fuel prices have moved in mixed directions, and high wind gusts could disrupt bunker deliveries in New York.

IMAGE: Cranes loading a container ship at a terminal in New York. Getty Images.

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

• VLSFO prices up in Balboa ($4/mt), and down in Zona Comun ($16/mt), New York ($6/mt) and Houston ($5/mt)
• LSMGO prices up in Zona Comun ($6/mt), and down in Houston ($53/mt), Balboa ($26/mt) and New York ($8/mt)
• HSFO prices down in Houston ($11/mt), Balboa ($6/mt) and New York ($1/mt)

Houston's LSMGO price benchmark has declined the most across all fuel grades and key ports in the Americas after two lower-priced 150-500 mt LSMGO stems were booked at the port at $1,020/mt and $1,018/mt, respectively, putting downward pressure on the benchmark.

The port's VLSFO price benchmark has also declined after three lower-priced VLSFO stems, fixed at $705/mt, $710/mt and $770/mt, weighed on the benchmark.

Both Houston and New York have recorded declines across all three fuel grades in the past day.

Weather conditions along the East Coast are reported to be rough, with wind gusts exceeding 20 knots in the region. Possible disruptions are expected in New York until tomorrow, a trader said.

Bunker demand in New York has softened from previous weeks. VLSFO is tight, with lead times of 8-9 days. HSFO can be delivered within a week, and LSMGO availability is good with lead times of 3-4 days.

Brent

The front-month ICE Brent contract has lost by $0.63/bbl on the day, trading at $92.14/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported a substantial decline in US crude stocks.

US crude oil inventories plunged by 9.1 million bbls in the week ending 5 June, according to the API.

Market participants had expected a much smaller draw of 3.4 million bbls.

A decline in US crude stocks indicate tightness in US oil market and may put some upward pressure on Brent's price.

“The latest data from the American Petroleum Institute (API) continues to show a tightening in the US oil market,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price has declined, following news that Israel and Iran have agreed to stop the fire exchange for the time being.

Israeli Prime Minister Benjamin Netanyahu said the Israel Defense Forces (IDF) will refrain from attacking Iranian sites “for now.”

The news has renewed hopes of a broader ceasefire deal between the US and Iran – a move that could eventually reopen the Strait of Hormuz to commercial vessel traffic.

“This weakness [in Brent’s price] came amid renewed hopes of an imminent deal between the US and Iran, following both Israel and Iran calling an end to the strikes over the weekend,” ING Bank’s analysts said.

The latest data coming out of China has put additional downward pressure on Brent’s price today.

China’s total oil imports declined by 3.2 million b/d year-on-year in May to about 7.8 million b/d, Bloomberg reported, citing Chinese customs data. It marked the “lowest level since October 2017,” according to ING Bank’s analysts.

By Gautamee Hazarika and Aparupa Mazumder

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