Americas Market Update 24 June

Fuel prices have moved down, and bunker delays are expected in St. Eustatius due to rough weather.

IMAGE: Oil tanker moving towards St. Eustatius island in the Caribbean. Getty Images

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

• VLSFO prices down in Los Angeles ($31/mt), Houston ($27/mt), Balboa, Zona Comun ($22/mt) and New York ($20/mt)
• LSMGO prices down in Los Angeles ($49/mt), Balboa ($47/mt), Zona Comun ($37/mt), New York ($35/mt) and Houston ($18/mt)
• HSFO prices down in Los Angeles ($25/mt), Houston ($23/mt), Balboa ($20/mt) and New York ($19/mt)

The Port of Los Angeles has recorded the steepest declines in HSFO, VLSFO and LSMGO prices.

The port's VLSFO price benchmark has decreased amid a lower-priced 150-500 mt VLSFO stem fixed at $681/mt.

The port's Hi5 spread has narrowed by $16/mt to $160/mt over the past day.

Fuel availability is normal in the ports of Los Angeles and Long Beach. Recommended lead times for HSFO, VLSFO and LSMGO are currently 7–10 days, a source said.

Bunker operations in St. Eustatius are facing delays due to high wind gusts in the area. Disruptions are expected to persist until 27 June, a trader tells ENGINE.

Brent

The front-month ICE Brent contract has lost $3.26/bbl on the day, to trade at $74.35/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure after the American Petroleum Institute (API) reported another decline in crude stocks.

US crude oil inventories recorded a decline of 765,000 bbls in the week ending 19 June, according to the API.

A fall in US crude stockpiles is generally seen as a sign of stronger oil demand and can provide upward support to Brent’s price.

Meanwhile, US Strategic Petroleum Reserve (SPR) inventories have declined by another 9.1 million bbls to 331.2 million bbls in the past week, “the lowest level in more than four decades and nearly 394 million barrels below maximum capacity,” according to Trading Economics.

Downward pressure:

Oil has come under further downward pressure as vessel traffic through the Strait of Hormuz's chokepoint seems to gradually recover.

US President Donald Trump claimed yesterday that 19 million bbls of oil flowed out of the Strait on Monday.

“Oil prices continue to move lower as flows from the Persian Gulf start to recover,” two analysts from ING Bank noted.

Since the onset of the US-Iran conflict, the Strait of Hormuz has remained largely closed to commercial traffic, first due to Iran’s de facto closure, and subsequently by a US blockade.

“Price action suggests the market is assuming a rapid recovery in traffic through the Strait of Hormuz,” the analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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