Americas Market Update 11 May

Fuel prices have mostly moved gained, and deliveries off Trinidad are currently suspended due to weather-related disruptions.

IMAGE: Container ship leaving the Port of Houston at Morgan's Point. Getty Images.

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

• VLSFO prices up in Houston ($58/mt), Balboa ($40/mt), Zona Comun ($26/mt), Los Angeles ($22/mt) and New York ($9/mt)
• LSMGO prices up in Balboa ($59/mt) and New York ($17/mt), and down in Los Angeles ($123/mt), Zona Comun ($11/mt) and Houston ($4/mt)
• HSFO prices up in Houston ($66/mt), Balboa ($18/mt) and New York ($12/mt), and down in Los Angeles ($22/mt)

The port of Houston has recorded the highest increase in prices for both HSFO and VLSFO in the past session, narrowing the port’s Hi5 spread to $83/mt today from $91/mt on Friday.

Availability for prompt supply is tight across HSFO, VLSFO and LSMGO at the port, with recommended lead times exceeding 5 days this week.

Meanwhile, Los Angeles’ LSMGO price benchmark has recorded the sharpest decline, falling by $123/mt since Friday. Nonetheless, the port is currently trading at premiums of $302/mt over Houston and $183/mt over New York for the grade.

Availability has remained tight at the US West Coast port, with lead times stretching to more than a week to secure avails, a trader has told ENGINE.

Bunker deliveries off Trinidad have currently been suspended, and possible disruptions are expected between 11-15 May due to high wind gusts and elevated sea conditions, a source said.

Brent

The front-month ICE Brent contract has gained $3.22/bbl on the day from Friday, to trade at $103.60/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude has moved closer to $105/bbl mark at the start of this week, as hostilities in the Middle East resurfaced over the weekend – effectively undermining expectations of a US-Iran ceasefire deal.

US President Donald Trump has rejected Iran’s response to a US-drafted ceasefire proposal, stating the response was “totally unacceptable,” without revealing any details of Iran’s reply.

Brent crude’s price “jumped this morning after the US rejected Iran’s latest peace plan proposal,” two analysts from ING Bank noted.

Last week, the US Navy struck three Iran-linked vessels, allegedly trying to transit Iran’s territorial waters – which is currently under a US blockade.

“Oil prices remain highly sensitive to noise around Iran, highlighting the significance of the ongoing supply disruptions in the Persian Gulf,” ING Bank analysts said.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by two to 410 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Gautamee Hazarika and Aparupa Mazumder

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