Americas Market Update 21 May

Fuel prices have moved down, and bunker demand has picked up in Los Angeles.

IMAGE: Cargo containers being offloaded in the Port of Los Angeles. Getty Images

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

• VLSFO prices down in Balboa ($21/mt), Zona Comun ($16/mt), Los Angeles ($13/mt), New York ($9/mt) and Houston ($2/mt)
• LSMGO prices down in Zona Comun ($38/mt), Balboa ($25/mt), Los Angeles ($17/mt), New York ($15/mt) and Houston ($13/mt)
• HSFO prices down in Los Angeles, Houston ($10/mt), New York ($8/mt) and Balboa ($7/mt)

Los Angeles' HSFO price benchmark has recorded the steepest decline for the grade. It is, however, still at premiums of over $200/mt over both New York and Houston.

Bunker demand in Los Angeles and Long Beach has increased modestly over the past week, and lead times for all three fuel grades stand at 7–9 days.

Balboa's HSFO price has declined in the past day after a lower-priced 50-150 mt HSFO stem was booked at the port at $822/mt put downward pressure on the benchmark.

In Panama, bunker demand is strong, and fuel prices at Balboa and Cristobal continue to be elevated, a trader tells ENGINE.

Fuel availability at both ports is normal, with most suppliers able to deliver VLSFO and LSMGO within 3–5 days. HSFO lead times stand at 4–6 days.

Brent

The front-month ICE Brent contract has lost $1.21/bbl on the day, to trade at $107.43/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has felt upward pressure after the US Energy Information Administration (EIA) reported its weekly US oil inventory report.

US crude oil inventories declined by 7.9 million bbls to 445 million bbls in the week ending 15 May, according to data from the EIA.

“This [EIA inventory report] highlights tightening in the US market on the back of stronger oil exports, amid ongoing supply disruptions in the Middle East,” two analysts from ING Bank noted.

A decline in US crude stocks could indicate improved demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price continues to remain highly reactive to Iran-related developments, with market participants putting significant weight on reports suggesting progress in US-Iran negotiations.

“Oil prices sold off heavily… with hopes growing once again for a potential US-Iran agreement,” ING Bank’s analysts said.

Washington is in the “final stages” of the ongoing negotiations with Tehran, Reuters reported citing US President Donald Trump as saying.

Trump’s remarks have put significant downward pressure on Brent’s price, market analysts said.

“As a result, ICE Brent settled more than 5.6% lower yesterday,” ING Bank’s analysts claimed.

By Gautamee Hazarika and Aparupa Mazumder

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