Americas Market Update 18 Mar

Fuel prices have generally risen, and stronger bunker demand in Panama has led to congestion and extended port lead times.

IMAGE: View of Houston from a cargo ship. Getty Images.

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

• VLSFO prices up in Balboa ($45/mt) and down in Houston ($6/mt)
• LSMGO prices up in Houston ($14/mt)
• HSFO prices up in Houston ($19/mt)

Houston's VLSFO price has dipped, despite Brent's significant increase over the past day. This price decline may have influence by three 500-1500 mt stems and one 150-500 mt stem, all lower-priced stems, which were fixed between $732-744/mt.

Demand at the port remains decent, but severe backlogs caused due to weather-related disruption of port operations, have resulted in increased lead times across all three fuel grades, a source said.

Balboa's VLSFO price has meanwhile gained by $45/mt and is currently at a premium of $85/mt to Cartagena in Colombia and a discount of $13/mt to Guayaquil in Ecuador.

In Panama, bunker demand has increased over the past few weeks, which is leading to congestion around the ports and resulting in longer lead times, a source said.

Prompt supply at the ports of Balboa and Cristobal is currently tight across all three conventional fuel grades, with lead times of at least 5–6 days.

Brent

The front-month ICE Brent contract has gained by $6.26/bbl on the day, to trade at $108.21/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude has remained firm as the Middle East conflict enters its third week with no signs of easing.

Oil flows through the Strait of Hormuz remain tightly constrained, even as Iran gave permission to limited tanker transits.

“With no sign of de-escalation in the Middle East, Brent crude appears to have found a floor just above $100/bbl,” two analysts from ING Bank noted.

Meanwhile, the Israel Defense Forces (IDF) has claimed to eradicate Iran’s security chief Ali Larijani. The news has raised market concerns of an Iranian retaliation that could disrupt supply and send oil prices higher.

“Confirmation of the death of Iran’s security chief, Ali Larijani, only increases uncertainty for markets. It’s unlikely to lead to de-escalation,” ING Bank’s analysts added.

Downward pressure:

Brent’s price moved lower following a surprise build in US crude stocks.

US crude oil inventories rose by 6.6 million bbls in the week ending 13 March, according to estimates from the American Petroleum Institute (API).

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

The US Federal Reserve (Fed) will hold its Federal Open Market Committee (FOMC) meeting later today to discuss the prospects of interest rate cuts in the US – amid the ongoing war.

Notably, higher interest rates in the US can dampen demand growth and make dollar-denominated commodities, like oil, more expensive for holders of other currencies.

By Gautamee Hazarika and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online