Americas Market Update 21 Apr

Fuel prices have moved in mixed directions, and adverse weather conditions have led to the suspension of bunker operations in the GOLA region.

IMAGE: Container ship docked in the Port of Balboa. Getty Images.

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

• VLSFO prices up in Houston ($27/mt), New York ($10/mt) and Zona Comun ($8/mt), and down in Balboa ($17/mt)
• LSMGO prices up in Houston ($41/mt), Zona Comun ($25/mt) and Balboa ($13/mt), and down in New York ($4/mt)
• HSFO prices up in Balboa ($10/mt) and Houston ($2/mt), and down in New York ($3/mt)

Balboa's VLSFO price benchmark has fallen, while all the other key ports have recorded price increases for the grade over the past day.

The dip may have been influenced by a lower-priced 500–1500 mt VLSFO stem, fixed at $782/mt, which put downward pressure on the benchmark.

Lead times are 3–5 days for VLSFO and LSMGO, and 4–6 days for HSFO at the port.

The port of Houston, meanwhile, has recorded the highest gains for VLSFO. The port's Hi5 spread has widened to $199/mt today, from $174/mt yesterday.

Lead times in Houston for VLSFO and HSFO currently stand at around 5–7 days, while LSMGO is more prompt at 3–4 days, a source said.

In the Galveston Offshore Lightering Area (GOLA), bunkering operations have been suspended on Monday due to poor sea conditions. Deliveries are expected to resume on 22 April, a trader tells ENGINE.

Brent

The front-month ICE Brent contract has gained $0.03/bbl on the day, to trade at $95.09/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has continued to trade above $95/bbl on the back of persistent tensions in the Middle East.

The US-Israel conflict with Iran is creating the ​“worst energy crisis ever faced by the ‌world,” according to Fatih Birol, the executive director of the International Energy Agency (IEA).

"This is indeed the biggest crisis ​in history," Reuters quoted Birol as saying in a radio interview.

Yemen-based Houthi militants have threatened to close the Bab al-Mandab Strait on the Red Sea, if hostilities between the US and Iran continue.

The Bab al-Mandab Strait is another key route to ship Middle Eastern oil to global markets. Blocking the region will cut off alternative options for Saudi Arabia’s oil shipments, according to market analysts.

“The oil market right now feels like a stage where the props are on fire, the script says panic,” remarked SPI Asset Management managing partner Stephen Innes.

Downward pressure:

Hopes of a de-escalation in the Middle East has capped Brent’s price gains today, with markets still factoring in the possibility of further negotiations.

A fresh round of talks between the Washington and Tehran is planned for Wednesday in Islamabad, the BBC reported.

“The US is sending negotiators to Pakistan for peace talks today. Iran, however, has said it doesn’t plan to take part in talks,” two analysts from ING Bank said.

By Gautamee Hazarika and Aparupa Mazumder

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