Americas Market Update 15 June

Fuel prices have moved in the downward direction, and rough weather is expected to suspend bunker deliveries in GOLA this week.

IMAGE: An LPG tanker sailing west along the Houston Ship Channel. Getty Images.

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

• VLSFO prices down in Balboa ($160/mt), Los Angeles ($129/mt), Zona Comun ($77/mt), New York ($63/mt), and Houston ($45/mt)
• LSMGO prices down in Balboa ($174/mt), New York ($106/mt), Houston ($88/mt), Los Angeles ($79/mt) and Zona Comun ($76/mt)
• HSFO prices down in Balboa ($87/mt), Houston ($71/mt), Los Angeles ($69/mt) and New York ($18/mt)

Fuel prices have tracked Brent's downward movement over the past day. Conventional fuel prices at the port of Balboa have recorded the steepest declines amongst the key Americas ports.

The port's VLSFO price benchmark declined by the highest margin, after a lower-priced 500-1500 mt VLSFO stem, fixed at $670/mt over the weekend, put downward pressure on the benchmark.

These price movements have pushed the port's Hi5 spread into negative territory, from $48/mt on Friday.

Availability is good at both Balboa and Cristobal, with recommended lead times of 3-4 days for VLSFO and LSMGO. HSFO requires slightly longer lead times of 4-5 days.

In the US Gulf, the Galveston Offshore Lightering Area (GOLA) is expected to face possible disruptions between 17-19 June due to strong wind gusts and rough sea conditions.

Operations at the anchorage are expected to be suspended early Wednesday morning, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost by $4.97/bbl on the day from Friday, trading at $83.16/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

While there are no significant upward pressures on Brent’s price today, investors remain focused on the long-term viability of the US-Iran peace deal and the eventual reopening of the Strait of Hormuz to normal shipping traffic.

“Restarting infrastructure and logistics flows could take time, while some shipping operators may remain cautious about returning to the Strait in the near term,” two analysts from ING Bank noted.

Oil inventories and strategic stockpiles will need to be replenished following the recent disruptions, according to ING Bank’s analysts. This dynamic “should keep [oil] prices supported even as flows gradually resume,” the two analysts added.

Downward pressure:

Brent crude’s price has declined at the start of this week after US President Donald Trump declared a preliminary peace deal with Iran.

The deal guarantees the reopening of the Strait of Hormuz to commercial vessel traffic and the immediate removal of the US naval blockade of the region.

“Signs of progress toward a peace deal in the Middle East pushed crude oil prices to their lowest level since early March,” ANZ Bank’s senior market strategist Daniel Hynes said.

The final text of the agreement will be signed in Switzerland on Friday. 

“Full details remain unclear, but reports suggest the agreement includes a halt to military activity across all fronts,” ING Bank’s analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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