Americas Market Update 16 Oct

Fuel prices have mostly moved in the upwards direction, and bunker deliveries at Freeport could be delayed due to high wind gusts.

IMAGE: The Atlantic entrance to the Panama Canal. Getty Images

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

• VLSFO prices up in Zona Comun ($25/mt), Balboa ($23/mt), Houston ($16/mt), New York ($12/mt) and Los Angeles ($9/mt)
• LSMGO prices up in Zona Comun ($66/mt), Houston ($26/mt), New York ($20/mt) and Los Angeles ($17/mt), and down in Balboa ($16/mt)
• HSFO prices up in Balboa ($20/mt), New York ($17/mt), Los Angeles ($11/mt) and Houston ($9/mt)

Balboa’s LSMGO price has declined over the past day, moving against the broader market trend and Brent’s upward movement. Two lower-priced LSMGO stems, offered at the port between $1,552-1,535/mt, may have weighed on the benchmark.

Bunker demand in Panama is strong, and no weather disruptions are expected at Balboa and Cristobal. VLSFO and LSMGO availability is normal at both ports, with recommended lead times of 3-6 days. HSFO requires slightly longer lead times of 4-7 days, a source said.

Meanwhile, high wind gusts could disrupt bunker deliveries at the anchorage in Freeport, Bahamas, between 18-20 October, a trader tells ENGINE.

Brent

The front-month ICE Brent contract has gained $1.37/bbl on the day, trading at $106.03/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the US Energy Information Administration (EIA) reported a sharp draw in US commercial crude oil stocks.

Commercial US crude oil inventories decreased by around 8.6 million bbls to 415.6 million bbls in the week ending 9 October, according to data from the EIA.

The EIA data marks “the largest weekly decline since February,” two analysts from ING Bank said. A draw in US crude stocks typically indicates stronger demand for oil and can support Brent’s price.

Uncertainty in the Middle East and concerns over oil flows through the Strait of Hormuz have led the global oil market to price in a “significant risk premium”, according to ING Bank’s analysts.

The analysts added that some kind of agreement between the US and Iran would be needed for that premium to be fully removed.

Downward pressure:

Brent’s gains have been capped after members of the International Energy Agency (IEA) agreed to accelerate the release of oil from emergency stockpiles.

IEA members have collectively released about 330 million bbls of crude oil and petroleum products from strategic reserves so far.

The release accounts for the bulk of the 400 million-bbl stock draw pledged by the 32-member countries earlier this year.

By Gautamee Hazarika and Aparupa Mazumder

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