Americas Market Update 12 Nov

Bunker prices have moved in mixed directions, and rough seas are expected to cause prolonged delays in GOLA over the weekend.

IMAGE: Cargo port with cranes and shipping containers along the entrance to the Panama Canal. Getty Images

Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Balboa ($53/mt), and down in Houston ($20/mt), New York ($18/mt) and Zona Comun ($11/mt)
• LSMGO prices down in Balboa ($37/mt), New York ($32/mt), Zona Comun ($17/mt) and Houston ($16/mt)
• HSFO prices down in Balboa ($31/mt), New York ($17/mt) and Houston ($7/mt)

Balboa’s VLSFO price has increased over the past day, while the port’s HSFO price has declined. The Hi5 spread has widened to $263/mt from $179/mt yesterday and $52/mt a month ago.

Most suppliers in Panama’s Balboa and Cristobal have reported tight VLSFO and HSFO availability this week. Stocks are expected to stay tight until next weekend, with lead times of 8-12 days recommended for both grades, a source said.

LSMGO availability has been better at the ports, with lead times of 3-5 days.

Prolonged delays are expected at the Galveston Offshore Lightering Area (GOLA) from Saturday morning, and high winds and rough seas are likely to disrupt operations until Monday.

All three grades have required lead times of 5-8 days in GOLA, a source said.

Brent

The front-month ICE Brent contract has gained $0.75/bbl on the day, trading at $93.80/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has found support as Iran hardened its stance against the US.

Iran’s security council secretary Mohsen Rezaei said in a televised interview that Iran will not allow any enriched nuclear material to leave the country and warned of consequences if the US launches new strikes, Reuters reported.

Washington has said nuclear issues must be part of any initial negotiations to end the war, Reuters reported.

Rezaei also dismissed claims that talks with Washington are under way and said reports of a recent meeting in Qatar were “pure lies” meant to calm energy markets and curb oil prices.

Crude oil exports from the Middle East “continue to rely on alternative routes around the Strait of Hormuz, leaving supply vulnerable to further disruption”, two analysts at Dutch bank ING said.

Downward pressure:

Brent’s gains have been capped by a recovery in Middle East oil output and a build in US crude stocks.

OPEC’s crude production rose by almost 2 million b/d in October to 27.16 million b/d, led by Saudi Arabia, Iraq and Kuwait, ING’s analysts said. Output from Saudi Arabia, the group’s de facto leader, climbed to 9.2 million b/d, close to pre-war levels.

Meanwhile, US crude oil inventories rose by 9 million bbls in the week ending 6 November, according to estimates from the American Petroleum Institute (API).

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

By Gautamee Hazarika and Aparupa Mazumder

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