Americas Market Update 13 Oct

Fuel prices have moved downward, and disruptions are expected at Zona Comun through the end of the week.

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

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

• VLSFO prices down in Los Angeles ($26/mt), Zona Comun ($23/mt), New York ($18/mt), Balboa ($13/mt) and Houston ($11/mt)
• LSMGO prices down in Los Angeles ($37/mt), New York ($36/mt), Houston ($22/mt) and Balboa ($3/mt)
• HSFO prices down in Los Angeles ($21/mt) and Houston, New York and Balboa ($11/mt)

Houston’s VLSFO price has declined the least among major hubs in the Americas. A lower-priced, 150-500 mt stem was fixed at the port at $760/mt.

The port’s HSFO price has fallen by the same amount, leaving Houston’s Hi5 spread unchanged at $195/mt over the past day. Prompt availability of all three fuel grades is tight at the port, and with lead times of at least five days, a trader said.

In Zona Comun, bunker deliveries are expected to face possible disruptions from high wind gusts today and again between 15-16 October. VLSFO and LSMGO are very tight at the anchorage this week and available only on prior consultation, a source said.

Brent

The front-month ICE Brent contract has lost $1.37/bbl on the day, trading at $105.40/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has remained well supported amid ongoing risks to oil supplies from the Persian Gulf.

“Tensions in the Middle East have been rising in recent weeks as Iran intensifies attacks on tankers in the Persian Gulf,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Repeated attacks by Yemen-based Houthi militants on critical sites in Saudi Arabia, including energy infrastructure, and continued threats to oil flows through the Strait of Hormuz have put further upward pressure on oil prices.

“At least 17 vessels have been attacked since the 28 September. This is raising concerns in the shipping industry that risks taken to transit the strait are becoming too high,” Hynes said.

Downward pressure:

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 6 October – putting some downward pressure on Brent’s price.

Speculators sold a little over 3,000 lots as of 6 October, decreasing net-long positions in Brent futures to a little over 201,000 lots.

When speculators reduce net-long positions, oil prices tend to decline. Conversely, when they boost these positions, prices typically rise, leading to a cycle where their actions can influence oil prices and the market.  

By Gautamee Hazarika and Aparupa Mazumder

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