Americas Market Update 27 Oct

Fuel prices have moved in mixed directions, and bunker demand in New York is strong this week.

IMAGE: Brooklyn waterfront with shipping containers and cranes. Getty Images

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

• VLSFO prices up in New York ($14/mt), Houston ($13/mt) and Los Angeles ($10/mt), and down in Zona Comun ($14/mt) and Balboa ($12/mt)
• LSMGO prices up in Balboa ($14/mt) and Los Angeles ($1/mt), and down in Houston ($36/mt) and New York ($3/mt)
• HSFO prices up in Balboa ($27/mt), Houston ($12/mt), New York ($10/mt) and Los Angeles ($5/mt)

New York’s VLSFO price has recorded the largest gains among major ports in the Americas for the grade. The port’s Hi5 spread has widened to $211/mt today from $207/mt yesterday.

Despite the port's LSMGO price declining over the past day, it continues to trade at a premium of $153/mt over Houston.

Bunker demand has increased over the past week into this week in New York, according to a trader.

Prompt supply of VLSFO and HSFO remains tight, with both grades requiring lead times of more than five days. LSMGO has been in better supply, with recommended lead times of 2-3 days.

Brent

The front-month ICE Brent contract has lost $0.60/bbl on the day, trading at $114.87/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt upward pressure as speculators have raised their bullish bets and supply concerns in the Middle East persist.

Money managers and hedge funds bought a little short of 9,000 lots in the week to 20 October, increasing their net-long positions in ICE Brent futures to over 241,000 lots, according to futures and options data from ICE Futures Europe.

When speculators boost net-long positions, oil prices typically rise.

Persian Gulf crude exports have fallen to 14.30 million b/d, while oil flows through the Strait of Hormuz are running at just 60% of normal levels, ANZ Bank’s senior commodity strategist Daniel Hynes said.

The oil market’s resilience “remains under acute pressure”, Hynes added.

Downward pressure:

Brent’s gains have been capped by renewed diplomatic efforts to ease tensions in the Middle East.

Senior officials from Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran yesterday, and the four countries agreed to continue talks, Reuters reported, citing Iranian state media.

By Gautamee Hazarika and Aparupa Mazumder

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