Americas Market Update 26 May

Fuel prices have moved upward, and possible delays are expected at St. Eustatius due to high wind gusts.

IMAGE: Aerial shot of a container ship arriving in the Port of Long Beach. Getty Images.

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

• VLSFO prices up in Balboa ($44/mt), Houston ($34/mt), Zona Comun ($32/mt), New York ($23/mt) and Los Angeles ($2/mt)
• LSMGO prices up in Balboa ($58/mt), Houston ($33/mt), New York ($31/mt) and Los Angeles ($8/mt)
• HSFO prices up in Balboa ($27/mt), New York ($19/mt), Houston ($14/mt) and Los Angeles ($2/mt)

Fuel prices across the Americas have tracked Brent's upward movement, recording gains over the past day.

Although Los Angeles LSMGO price recorded the smallest gains across the different ports, the grade is currently trading at premiums of $174/mt to Houston and $74/mt to New York.

VLSFO and HSFO prices at the port have both uniformly increased, maintaining the port's Hi5 spread at $156/mt today.

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

At St. Eustatius, possible disruptions are expected from today through 30 May due to high wind gusts. This could lead to delays in bunker deliveries, a trader said.

Brent

The front-month ICE Brent contract has increased by $0.69/bbl on the day, trading at $98.90/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has moved slightly higher in the previous session on the back of mounting concerns of a prolonged US-Iran conflict.

Yesterday, US Central Command (CENTCOM) spokesperson Tim Hawkins said the US military struck missile sites in southern Iran.

The news comes at a time when both sides are widely expected to reach a peace deal, ultimately reopening the Strait of Hormuz to commercial vessel traffic and easing pressure on oil prices.

“Targets included missile launch sites and Iranian boats attempting to emplace mines,” Hawkins said.

Market analysts predict that renewed military escalation will drive prices up again, keeping the market fixated on Middle East tensions until navigation through the Strait of Hormuz is fully restored.

“The entire global maritime system rests on a surprisingly fragile network of narrow corridors [such as the Strait of Hormuz] acting as the hidden circulatory system of the world economy,” SPI Asset Management managing partner Stephen Innes remarked.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by 10 to 425 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Gautamee Hazarika and Aparupa Mazumder

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