Americas Market Update 24 July

Fuel prices have mostly declined across major ports in the Americas, and adverse weather conditions are expected to cause delays at GOLA.

IMAGE: A group of tankers in port along the Houston Ship Channel, Texas. Getty Images

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

• VLSFO prices up in Balboa ($8/mt), and down in Los Angeles ($38/mt), Houston ($33/mt), New York ($30/mt) and Zona Comun ($27/mt)
• LSMGO prices down in Balboa ($75/mt), Los Angeles ($74/mt), New York ($66/mt), Zona Comun ($50/mt) and Houston ($44/mt)
• HSFO prices down in Los Angeles ($41/mt), New York ($26/mt), Houston ($24/mt) and Balboa ($21/mt)

Houston's LSMGO price has declined after a lower-priced 150-500 mt LSMGO stem was booked at the port at $1,185/mt, which has weighed on the benchmark.

Houston's LSMGO price benchmark is currently at discounts of $110/mt to Los Angeles and $94/mt to New York.

In the Galveston Offshore Lightering Area (GOLA), bunker operations have faced disruptions from a tropical storm. Delays are expected through the end of the day, a trader tells ENGINE.

Balboa's VLSFO price benchmark has been the only VLSFO price among major bunker locations to increase over the past day, despite Brent's downward movement.

The benchmark has gained after a higher-priced 150-500 mt VLSFO stem was booked at the port at $757/mt.

Availability is normal in Balboa, with suppliers recommending lead times of 3-5 days for VLSFO and LSMGO, while HSFO requires around seven days.

Brent

The front-month ICE Brent contract has lost $2.42/bbl on the day, to trade at $97.39/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has held largely steady amid supply disruption concerns.

The US Central Command (CENTCOM) has been striking Iran for 13 consecutive days, while Tehran has conducted further rounds of retaliatory attacks on US allies in the Gulf.

“Further escalation in the Persian Gulf and fears of a widening conflict are putting a significant amount of oil supply at risk,” two analysts from ING Bank noted.

The Red Sea has also become a major point of concern for the oil market after Yemen’s Iran-backed Houthi militants struck two Saudi Arabian crude oil tankers yesterday.

“Houthi attacks on Saudi vessels in the Red Sea have the potential to widen this conflict, leading to further escalation,” ING Bank’s analysts said.

Downward pressure:

An unexpected increase in US crude stocks has put some downward pressure on Brent’s price this week.

US crude oil inventories gained by 2 million bbls to 411.7 million bbls in the week ending 17 July, according to data from the US Energy Information Administration (EIA).

The American Petroleum Institute (API) reported a slightly higher inventory rise of 2.6 million bbls during the same week.

A build in US crude stocks can indicate lower demand for oil.

By Gautamee Hazarika and Aparupa Mazumder

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