Americas Market Update 12 Aug

Fuel prices across the Americas have moved in mixed directions, and bunker demand has been good in Houston.

IMAGE: A tanker sailing along the Houston Ship Channel on the way to Galveston Bay. Getty Images

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

• VLSFO prices up in Zona Comun ($5/mt) and Houston ($2/mt), and down in Balboa ($37/mt), New York and Los Angeles ($2/mt)
• LSMGO prices up in Los Angeles ($5/mt) and Houston ($1/mt), and down in Zona Comun ($28/mt), New York ($17/mt) and Balboa ($1/mt)
• HSFO prices up in Los Angeles ($7/mt) and Houston ($2/mt), and down in Balboa ($23/mt) and New York ($5/mt)

Balboa’s VLSFO price has slumped over the past session, after a lower-priced, 500-1,500 mt stem, fixed at $737/mt, weighed down on the benchmark.

The port’s LSMGO price also declined, after a lower-priced 50-150 mt stem, fixed at $1,315/mt, put downward pressure on the benchmark.

In Balboa, VLSFO and LSMGO can be delivered within lead times of 4-6 days. HSFO requires over five days, a source said.

Conversely, conventional fuel prices at Houston recorded price gains over the past day, tracking Brent's upward movement.

Bunker demand at the port is good and has seen a slight uptick, a source said. Availability at the port is normal. Suppliers recommend lead times of 5-7 days for HSFO and VLSFO, while LSMGO can be delivered within 4-5 days, a trader said.

Brent

The front-month ICE Brent contract has gained $0.85/bbl on the day, to trade at $88.54/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt upward pressure on the back of escalating tension between the US and Iran.

Tehran has reiterated that the Strait of Hormuz will remain closed unless Washington agrees to the six sweeping conditions it announced earlier this week.

The demands include a total cessation of all US military action in the region and the immediate withdrawal of all US naval and air forces from around Iran, among others.

“The likelihood of a deal to reopen the Strait of Hormuz remains low,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent’s price gains were capped after the American Petroleum Institute (API) reported a sizeable increase in US crude stocks.

US crude oil inventories increased by 9.07 million bbls in the week ending 7 August, against market expectations of a 500,000-bbl draw.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Gautamee Hazarika and Aparupa Mazumder

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