Americas Market Update 27 May

Fuel prices have declined across all key ports in the Americas, and dense fog could disrupt operations in New York this week.

IMAGE: Aerial view of Port Newark. Getty Images.

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

• VLSFO prices down in Balboa ($83/mt), Los Angeles ($73/mt), Houston ($61/mt), New York ($36/mt) and Zona Comun ($20/mt)
• LSMGO prices down in Houston ($100/mt), Balboa ($88/mt), New York ($84/mt) and Los Angeles ($40/mt)
  
• HSFO prices down in Los Angeles ($64/mt), Balboa ($47/mt), New York ($34/mt) and Houston ($9/mt)

Houston's LSMGO price has declined the most among the grade, after a lower-priced 150-500 mt stem, fixed at $1,157/mt, put downward pressure on the benchmark.

The port's VLSFO price also declined after a lower-priced 150-500 mt stem, fixed at $815/mt, weighed on the benchmark.

Today, Houston's VLSFO price is trading at a $36/mt discount to New York, compared to an $11/mt discount yesterday.

Occasional dense fog and high wind gusts at New York have led to delays this week and could further disrupt operations through this Sunday, a source said.

Balboa's VLSFO price benchmark has declined almost twice as much as the port's HSFO price, narrowing the port's Hi5 spread to $36/mt today, from $72/mt on Tuesday.

Fuel availability at both the ports of Balboa and Cristobal is normal, with most suppliers able to deliver VLSFO and LSMGO within 3–5 days while HSFO lead times stand at 4–6 days.

Brent

The front-month ICE Brent contract has decreased by $3.57/bbl on the day, trading at $95.33/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

US military activity continues around the Persian Gulf, fueling supply disruption concerns and putting some upward pressure on Brent crude’s price.

Earlier this week, the US Navy struck missile launch sites in southern Iran, as well as boats allegedly attempting to lay mines in the Strait of Hormuz, the US Central Command (CENTCOM) reported.

Shortly after the airstrikes, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed it had shot down US drones attempting to enter Iranian airspace, Al Jazeera reported.

“The renewed hostilities came despite the US touting progress toward a peace deal,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has declined as market participants shifted focus from Middle East hostilities threats to optimism over a potential US-Iran peace deal.

“Prices are under pressure from improved sentiment around a potential US‑Iran deal,” two analysts from ING Bank wrote.

Earlier this week, Iran’s parliamentary speaker Mohammad Bagher Ghalibaf and foreign minister Abbas Araghchi traveled to Doha, Qatar, to push negotiations toward a final stage.

Market participants will remain focused on any development in the Middle East conflict until the Strait of Hormuz is completely open to vessel traffic.

By Gautamee Hazarika and Aparupa Mazumder

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