Americas Market Update 2 Dec

Fuel prices showed mixed movements, and the Sabine Neches waterway is set to remain closed until 5pm local time for dredge pipeline installation.

IMAGE: Aerial view of the Port of Houston, Texas. Getty Images

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

• VLSFO prices up in Balboa ($16/mt), New York ($9/mt) and Zona Comun ($6/mt), and down in Houston ($11/mt) and Los Angeles ($3/mt)
• LSMGO prices up in Balboa ($10/mt) and New York ($4/mt), and down in Los Angeles ($13/mt) and Houston ($10/mt)
• HSFO prices up in Los Angeles ($10/mt), Houston ($3/mt) and New York ($2/mt), and down in Balboa ($9/mt)

Los Angeles' HSFO price has increased the most amongst the ports, placing it at premiums of $7/mt to New York and $36/mt to Houston today.

HSFO availability is steady at the West Coast port and requires 7–8 days of lead time, a source said.

In the Gulf of America, the Sabine Neches waterway will be closed from 11am to 5pm local time on Tuesday to allow installation of a dredge pipeline near the Sabine station.

This can lead to temporary congestion and restricted vessel movements in the area.

Balboa’s VLSFO price has posted the strongest gain, while the port’s HSFO price has declined, widening the Hi5 spread to $48/mt today from $23/mt yesterday.

In Zona Comun, bunkering operations continue after a recent fire at a major supplier’s refinery halted the production of heavy fuel. Two out of three suppliers continue to deliver bunkers at the anchorage, though wait times have increased this week, a source said.

Brent

The front-month ICE Brent contract has gained $0.13/bbl on the day, to trade at $63.07/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Risks from Ukrainian drone strikes on Russian energy facilities and escalating US–Venezuela tensions have contributed to upward pressure on Brent futures.

“Crude oil prices rose after a terminal in the Black Sea was damaged. One of three moorings on a pipeline linking Kazakh oil fields to Russia’s Black Sea coast was damaged by a Ukrainian attack,” said ANZ Bank senior commodity strategist Daniel Hynes.

A senior US official said President Donald Trump has been consulting his top advisers on the pressure campaign against Venezuela. On Saturday, Trump said the airspace above and surrounding Venezuela should be considered “closed in its entirety,” though he gave no further details, according to Reuters.

“The US is also widening its campaign against Venezuela, raising concerns that oil exports may be further impacted,” Hynes added.

On Sunday, OPEC+ reaffirmed a small production increase for December and paused further hikes in the first quarter of next year because of growing fears of a supply glut. The decision remains supportive for oil prices in the near term.

Downward pressure:

Mixed sentiment around US crude and product stock levels has put pressure on oil prices.

Market watchers are now looking ahead to the US Energy Information Administration’s weekly inventory report, due Wednesday.

By Gautamee Hazarika and Tuhin Roy

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