Americas Market Update 26 Mar

Bunker fuel prices have moved upward, and a low risk of sea fog is expected in the Gulf region this week.

IMAGE: Aerial view of Port Newark. Getty Images.

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

• VLSFO prices up in Balboa ($72/mt), Los Angeles ($69/mt) and Houston ($51/mt)
• LSMGO prices up in Los Angeles ($185/mt), Balboa ($113/mt) and Houston ($76/mt)
• HSFO prices up in Balboa ($65/mt) and Houston ($55/mt)

Bunker fuel prices have tracked Brent crude oil’s upward movement in the past session, with gains recorded across key ports in the Americas.

Among the three conventional fuel grades, LSMGO has increased the most, posting the steepest gains, rising by $185/mt in Los Angeles and $113/mt in Balboa.

In Panama, ports of Balboa and Cristobal are experiencing a rise in bunker demand, tightening availability across all three conventional fuel grades.

Lead times for VLSFO and LSMGO are currently 5–6 days, while HSFO requires 6–8 days.

In Houston, HSFO and VLSFO prices have risen by $55/mt and $51/mt, respectively, resulting in the Hi5 spread narrowing to $91/mt, down from $95/mt yesterday.

Both, the Houston Ship Channel and the Sabine–Neches Waterway, are currently open, with low sea fog risk expected across the Gulf region.

At the port, bunker demand remains steady, with suppliers recommending lead times of at least one week for all three conventional fuel grades of VLSFO, LSMGO, and HSFO.

Brent

The front-month ICE Brent contract has gained $7.98/bbl on the day, to trade at $107.44/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has bounced back above $100/bbl mark as Iran rejected Washington’s claims of negotiating with Tehran.

The US has put forward a 15-point ceasefire plan to Iran that could open the door to a month-long truce. Tehran, however, has dismissed claims that any direct negotiations with the US are underway.

“Has the level of your inner struggle reached ‌the ⁠stage of you negotiating with yourself?” Reuters reported, quoting Iranian military spokesperson Ebrahim Zolfaqari as saying.

The Strait of Hormuz – which is highly critical for crude oil flows – continues to remain closed to commercial vessel movement, adding upward pressure on Brent’s price, according to analysts.

“For oil, the crucial element is the guarantee of safe and unrestricted passage for international shipping through the Strait of Hormuz, effectively reopening it to all vessels,” Price Futures Group’s senior market analyst Phil Flynn wrote.

Downward pressure:

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

Commercial US crude oil inventories increased by 6.9 million bbls to 456 million bbls in the week ending 20 March, according to data from the EIA.

Yesterday, the American Petroleum Institute (API) reported a rise of 2.3 bbls in the week.

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

By Gautamee Hazarika and Aparupa Mazumder

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