Americas Market Update 2 Nov

Fuel prices have declined in the Americas ports, and fog season is expected to disrupt bunkering operations across the US Gulf Coast over the coming months.

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

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

• VLSFO prices down in Zona Comun ($55/mt), Los Angeles ($34/mt), Houston ($27/mt), Balboa ($21/mt) and New York ($16/mt)
• LSMGO prices down in Zona Comun ($213/mt), Houston ($95/mt), Los Angeles ($66/mt), Balboa and New York ($52/mt)
• HSFO prices down in Houston ($57/mt), Balboa ($34/mt), New York ($24/mt) and Los Angeles ($20/mt)

Bunker prices have recorded significant declines over the weekend, in line with Brent's fall.

Zona Comun has posted the steepest falls for both VLSFO and LSMGO over the past session. Supply is tight at the anchorage, with both grades needing a notice of 7-10 days, a source said.

Houston's VLSFO price has fallen the least of the port's three grades. Two stems of 150-500 mt, fixed between $810-829/mt, has limited the grade's decline.

Houston's VLSFO price is currently trading at discounts of $283/mt to Los Angeles and $50/mt to New York.

Fog season has also begun along the US Gulf Coast and could disrupt vessel movements at ports in the region in the coming months, a source told ENGINE.

Brent

The front-month ICE Brent contract has lost $8.54/bbl on the day from Friday, trading at $108.60/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has found some support from concerns that the oil market has little room left to absorb another supply shock.

The market has adapted to eight months of Middle East disruption, but its ability to absorb another shock “has diminished,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Persian Gulf exports remain constrained, tanker availability is tight and global distillate inventories sit around 5% below their five-year average, Hynes added.

Besides, US President Donald Trump has also repeatedly threatened to restart strikes on Iran after the US midterm elections, scheduled for tomorrow, leaving more room for supply disruptions.

“The oil market is likely to remain nervous this week ahead of the US midterm elections,” two analysts from ING Bank noted.

Downward pressure:

Brent’s price has come under pressure on hopes of progress in talks to end the war between Iran, and the US and Israel.

Iranian negotiators left talks with Qatari mediators in Doha yesterday, but not because of difficulties in the negotiations, Reuters reported, citing an official briefed on the meeting.

“It remains to be seen whether this [diplomacy] will lead to anything,” ING Bank’s analysts said.

The front-month ICE Brent contract has changed from December to January, which goes a long way to explain today’s drop in price.

Brent’s December contract was trading around $117/bbl on Friday. However, the January contract opened near $111/bbl today, accounting for much of the roughly $7/bbl decline.

By Gautamee Hazarika and Aparupa Mazumdar

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