Americas Market Update 18 Aug

Fuel prices across the Americas have moved in mixed directions, and the National Hurricane Center has issued an advisory for Hurricane Lala in the Central Pacific.

IMAGE: Brooklyn waterfront with shipping containers and cranes. Getty Images

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

• VLSFO prices up in Zona Comun ($18/mt), Houston ($10/mt), Balboa ($4/mt) and New York ($3/mt), and down in Los Angeles ($5/mt)
• LSMGO prices up in Balboa ($22/mt), New York ($19/mt), Houston ($4/mt) and Zona Comun ($1/mt), and unchanged in Los Angeles
• HSFO prices up in Balboa ($18/mt) and Houston ($5/mt), unchanged in New York, and down in Los Angeles ($2/mt)

Houston's HSFO price has increased slightly after a 150–500 mt stem, fixed at $477/mt, pushed the benchmark up. Despite the increase, the port's HSFO price benchmark is currently trading at discounts of $204 to Los Angeles and $27/mt to New York.

Houston's VLSFO price has increased by double its HSFO price over the past day, widening the Hi5 spread to $234/mt from $229/mt on Monday.

Bunker fuel demand in Houston has been firm, with prompt availability tight across all three conventional grades. Suppliers are recommending lead times of around 5–7 days, a trader tells ENGINE.

The Atlantic hurricane season is ongoing, and the National Hurricane Center has issued an advisory for Hurricane Lala in the Eastern Pacific.

Brent

The front-month ICE Brent contract has gained by $2.13/bbl on the day, to trade at $91.32/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has moved higher, following the expiration of the 60-day US-Iran peace accord signed on 17 June.

“Talks appear to be at a standstill, as the 60-day truce expired on Monday,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Washington has decided to not extend the ceasefire, while Tehran is prepared to launch a “full offensive” policy against the US, as negotiations failed to reach a positive outcome.

“Oil prices remained supported by rising geopolitical risks and supply concerns,” two analysts from ING Bank noted.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts will keep an eye out for US crude stocks data that will be out later this week.

Last week, the US Energy Information Administration (EIA) reported a massive 17.4 million bbls build in commercial US crude oil inventories, in the week ending 7 August.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Gautamee Hazarika and Aparupa Mazumder

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