Americas Market Update 23 Apr

Bunker fuel prices have moved in mixed directions, while bunkering operations in GOLA have resumed after being suspended earlier on Monday.

IMAGE: Houston Ship Channel. Port Houston.

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

• VLSFO prices up in Balboa ($27/mt), Houston ($14/mt), Zona Comun ($10/mt) and New York ($6/mt), and down in Los Angeles ($4/mt)
• LSMGO prices up in Houston ($78/mt), Balboa ($38/mt) and Los Angeles ($19/mt), and down in New York ($52/mt) and Zona Comun ($1/mt)
• HSFO prices up in New York, Balboa ($7/mt), and Houston ($5/mt), and down in Los Angeles ($1/mt)

Houston's LSMGO price has increased the most across all key ports and the three fuel grades over the past day.

This may have been influenced by a higher-priced 150–500 mt LSMGO stem, fixed at $1,183/mt today, which has put upward pressure on the benchmark.

Meanwhile, New York's LSMGO price has dipped significantly after a lower-priced 150–500 mt LSMGO stem, fixed at $1,185/mt, put downward pressure on the benchmark.

These price movements have narrowed Houston's discount over New York to $37/mt today, down from the $167/mt discount it held yesterday for the grade.

In the US Gulf, bunkering operations have resumed in the Galveston Offshore Lightering Area after they were suspended earlier on Monday due to poor sea conditions.

Typical lead times at the anchorage for VLSFO and LSMGO have been around 7–9 days over the past week, a trader said.

Brent

The front-month ICE Brent contract has gained $1.88/bbl on the day, to trade at $102.08/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has surpassed $100/bbl as traffic through the Strait of Hormuz remains shut.

According to a Bloomberg report, only one bulk carrier attempted to exit the strait in the past 24 hours.

Iran’s Revolutionary Guards (IRGC) seized two container vessels yesterday, Reuters reported citing Iran’s semi-official Tasnim News Agency.

The move comes despite the ongoing ceasefire between Washington and Tehran and in response to the US Navy’s seizure of two Iran-linked vessels earlier this week and blockade of the Strait of Hormuz.

“Iran’s seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue,” two analysts from ING Bank noted.

Meanwhile, Israel’s military has continued attacking southern Lebanon, Reuters reported. The attacks come amid a separate ceasefire deal agreed between Beirut and Tel Aviv.

“The oil market is repricing expectations with little sign of progress in finding a resolution in the Persian Gulf,” ING Bank analysts said.

Downward pressure:

Brent’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported a build in US crude oil stocks.

Commercial US crude oil inventories increased by 1.9 million bbls to about 466 million bbls in the week ending 17 April, according to data from the EIA.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

“Energy Information Administration data continue to show that the US is exporting record amounts of oil,” ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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