Americas Market Update 21 July

Fuel prices have moved upwards, and potential delays are expected along the US Gulf Coast due to Tropical Storm Bertha.

IMAGE: Heavy industrial rigs at a shipyard near Houston, Texas. Getty Images

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

• VLSFO prices up in Houston ($56/mt), New York ($40/mt), Balboa ($34/mt) and Los Angeles ($21/mt), and down in Zona Comun ($9/mt)
• LSMGO prices up in New York ($75/mt), Houston ($61/mt), Los Angeles ($54/mt), Balboa ($52/mt) and Zona Comun ($18/mt)
• HSFO prices up in New York ($33/mt), Balboa ($26/mt), Los Angeles ($18/mt) and Houston ($16/mt)

Prices have largely tracked Brent's upward movement over the past day across all key ports in the Americas, except Zona Comun's VLSFO price benchmark, which has dipped.

The anchorage's VLSFO price benchmark has declined after two lower-priced, 500-1,500 mt VLSFO stems, fixed at $769/mt and $759/mt, weighed down on the benchmark.

VLSFO and LSMGO availability is good in Zona Comun, with suppliers typically taking 5-7 days to deliver by barge, a source said.

In the US Gulf Coast, Tropical Storm Bertha could cause delays, a trader tells ENGINE.

"Mobile, Pascagoula, New Orleans, Lake Charles, Beaumont, Houston, Galveston, Freeport, Corpus Christi, GOLA/Corpus Offshore are all possibly in the storm's path," the trader adds.

Brent

The front-month ICE Brent contract has gained by $2.82/bbl on the day, to trade at $91.05/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Yemen’s Iran-backed Houthi militant group has declared a naval blockade on Saudi Arabia, escalating the US-Iran conflict directly to the Red Sea and pushing Brent’s price higher.

Riyadh is highly dependent on the route, transporting about 70% of its crude through the Red Sea port of Yanbu to circumvent the Strait of Hormuz.

“Since disruptions hit the Persian Gulf, the Saudis have increased exports from Yanbu in the Red Sea, shipping around 4.6m b/d [4.6 million b/d] of crude in June, up from around 1.3m b/d [1.3 million b/d] at the start of the year,” two analysts from ING Bank said.

The announcement comes shortly after Iran instructed the Houthis to prepare to close the Bab al-Mandeb Strait connecting the Red Sea to the Gulf of Aden.

“An effective blockade would prevent oil flows to Asia… vessels would have to take the much longer route through the Suez Canal and go around Africa,” ING Bank’s analysts added.

Downward pressure:

Reports about some efforts to ease the situation in the Middle East has put some downward pressure on Brent’s price today.

Mediators ​have proposed a 10-day ceasefire plan to ​de-escalate ​the US-Iran conflict, in a bid ​to ​ ‌revive ⁠the interim deal reached ​in June, ⁠Reuters reported citing a senior Iranian ​official.

The oil market is yet to see a meaningful easing of tensions, ING Bank’s analysts noted. “This won’t be an easy task. Large divisions remain between the US and Iran,” they added.

By Gautamee Hazarika and Aparupa Mazumder

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