Americas Market Update 16 Feb

Bunker fuel prices have risen across major Americas bunkering hubs, while dense fog has caused temporary Gulf Coast port closures and may delay operations.

IMAGE: Cranes loading a container ship at a marine terminal in New York. Getty Images.

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

• VLSFO prices up in New York ($13/mt), Los Angeles, Zona Comun ($7/mt), Balboa ($5/mt) and Houston ($3/mt)
• LSMGO prices up in Houston, Balboa ($23/mt), Zona Comun ($21/mt), New York ($15/mt) and Los Angeles ($2/mt)
• HSFO prices up in Houston, Balboa ($10/mt), New York ($9/mt) and Los Angeles ($1/mt)

Fuel prices have gained across all three fuel grades at key ports over the past session, tracking Brent’s upward movement.

New York's VLSFO price recorded the steepest gains. It is currently trading at a premium of $63/mt to Houston, up from $38/mt three months ago in November.

In New York, the availability of VLSFO and LSMGO is normal, with lead times of 3–5 days. HSFO requires longer lead times but can be delivered in around seven days, a source said.

Extreme cold weather has continued to disrupt some bunkering operations, while high wind gusts in New York Harbor have also caused delays.

Similarly, as the US Gulf is in fog season, dense fog continues to cause port closures and will likely back up bunker barge deliveries, a trader tells ENGINE.

At Houston, VLSFO and LSMGO availability is okay, but HSFO is getting slightly tight and requires lead times of at least 7–8 days. VLSFO and LSMGO can be delivered by most suppliers within 5 days, a source said. 

Brent

The front-month ICE Brent contract has gained by $0.59/bbl on the day from Friday to trade at $67.91/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Oil has retained some ground after official drilling figures showed a decline in US oil rigs.

The total number of oil rigs declined by three over the week at 409, according to Baker Hughes.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

Downward pressure:

Brent crude’s price has come under downward pressure as market participants remained focused on the upcoming US-Iran nuclear talks, that is expected to ease supply-related concerns.

Representatives from both nations will hold a second round of talks in Geneva tomorrow, Reuters reported.

The talks primarily aim to discuss Tehran’s nuclear enrichment programme – something Washington has consistently opposed.

Iran is expected to reach an agreement with the US that could benefit both countries economically, Reuters further reported citing an Iranian diplomat.

The global oil market is facing considerable uncertainty, “over how the situation between the US and Iran evolves,” two analysts from ING Bank noted.

By Gautamee Hazarika and Aparupa Mazumder

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