Americas Market Update 19 Feb

Fuel prices have mostly moved upwards across the key ports, and Balboa’s Hi5 spread has recorded a marked recovery over the past year.

IMAGE: Vessel docked in the Port of Houston in the US. Port of Houston

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

• VLSFO prices up in Balboa ($23/mt), Los Angeles and New York ($18/mt), and down in Houston ($11/mt)
• LSMGO prices up in Los Angeles, Balboa ($24/mt), Houston ($20/mt) and New York ($18/mt)
• HSFO prices up in Los Angeles ($15/mt), Balboa ($14/mt), Houston and New York (13/mt)

Fuel prices across all ports have tracked Brent’s upward movement, except Houston’s VLSFO price benchmark, which has defied the general market direction in the past day.

The port’s VLSFO price has plunged after a lower-priced 150–500 mt stem, booked at $444/mt, put downward pressure on the benchmark.

The grade is currently trading at discounts of $117/mt to Los Angeles and $80/mt to New York.

In Houston, VLSFO and HSFO are tight for prompt delivery and require at least 7–10 days of lead time. LSMGO availability has been comparatively better, with most suppliers able to deliver within 5–7 days.

Meanwhile, Balboa has recorded a healthy Hi5 spread of $105/mt today, which is more than double the $51/mt it was at a year ago.

Availability remains steady at the port with lead times for all three conventional grades at 3–5 days.

Brent

The front-month ICE Brent contract has gained by $2.08/bbl on the day to trade at $71.37/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has gained by nearly $4/bbl as supply disruption concerns in the Middle East have come into the limelight once again.  

Senior US officials have said that, despite progress in the second round of negotiations in Geneva, Iran appears to be disregarding Washington’s demands, according to market analysts.

“While talks in Geneva between the US and Iran were constructive, US Vice President JD Vance said [in an interview with Fox News] that Iran is ignoring key US demands,” two analysts from ING Bank noted.

Meanwhile, Iranian military shut down the Strait of Hormuz yesterday, Reuters reported, citing Iranian state media.

It is still unclear if the vital transit is fully operational yet. About 20% of the global crude oil supply passes through the strait.

“For oil markets, the concern is clearly what action would mean not only for Iranian oil supply, but also broader Persian Gulf oil flows,” ING Bank’s analysts added.

Downward pressure:

While there are no significant downward pressures on Brent’s price at the moment, market analysts currently await US Energy Information Administration’s (EIA) report on US crude stocks build.

A build in US crude stocks can signal softer demand and may place downward pressure on oil prices.

The EIA data is delayed by a day due to Presidents’ Day holiday.

By Gautamee Hazarika and Aparupa Mazumder

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