Americas Market Update 16 Apr

Fuel prices have generally trended higher, and extended delays are likely in Zona Comun.

IMAGE: Cargo ships in the Port of Los Angeles. Getty Images.

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

• VLSFO prices up in Houston ($29/mt), Zona Comun ($15/mt), Los Angeles and New York ($5/mt), and down in Balboa ($79/mt)
• LSMGO prices up in Zona Comun ($71/mt), Los Angeles ($28/mt) and New York ($19/mt), and down in Balboa ($53/mt) and Houston ($44/mt)
• HSFO prices up in Los Angeles ($28/mt), Houston ($11/mt), New York ($10/mt) and Balboa ($8/mt)

Balboa's VLSFO price has plunged, despite Brent's upward movement over the past day. A lower-priced 500–1500 mt VLSFO stem, booked at $802/mt, may have put downward pressure on the benchmark.

At Balboa and Cristobal, bunker demand and prices remain elevated, while supply conditions are steady, a trader tells ENGINE. Lead times are 3–5 days for VLSFO and LSMGO, and 4–6 days for HSFO.

Los Angeles' HSFO price has gained the most among the grades and is currently at premiums of $302/mt to New York and $270/mt to Houston.

Prices at the port of Los Angeles have been higher this week than in New York and Houston, with LSMGO trading at premiums well above $200/mt, a trader said.

Most suppliers are able to deliver all three conventional grades at Los Angeles within 7–8 days.

In Argentina's Zona Comun, high wind gusts between 16 and 17 April may suspend deliveries if winds exceed 20 knots, and prolonged delays are expected, a source said.

Brent

The front-month ICE Brent contract has gained $1.18/bbl on the day, to trade at $96.48/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent has gained in the previous session after Iran threatened to disrupt global shipping routes beyond the Strait of Hormuz, including the Persian Gulf, Gulf of Oman, and the Red Sea.

Iran’s military commander Ali Abdollahi has warned that Tehran will “not tolerate any US-led maritime blockade” targeting Iranian commercial and oil tankers in the Persian Gulf, Gulf of Oman, or Red Sea, state-owned news agency Tasnim reported.

“The longer the conflict drags on, the more persistent these price dynamics are likely to be,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Oil felt further upward pressure after the US Energy Information Administration (EIA) reported a decline in US crude stocks. Commercial US crude oil inventories decreased by 900,000 bbls to 464 million bbls in the week ending 10 April, according to data from the EIA.

“The oil market doesn’t need a worst-case escalation to justify higher pricing. Tight balances are sufficient to sustain the price of Brent near or above recent threshold levels,” Hynes said.

Downward pressure:

Hopes of de-escalation in the Middle East conflict has capped some of Brent’s price gains today, as market participants eye a potential resumption in talks to bring an end to the conflict. 

Oil market analysts continue to hope that the US and Iran will extend their ceasefire by another 2 weeks, two analysts from ING Bank said.

US President Donald Trump said in an interview with Fox News said that the war is “very close to over,” suggesting that a fresh round of negotiation may be held this week.

“Oil prices continue to move lower amid signals that a ceasefire between the US and Iran will be extended,” ING Bank analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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