Americas Market Update 28 Apr

Fuel prices have moved in the upward direction, and deliveries in GOLA are expected to be delayed through Saturday.

IMAGE: Cranes loading a container ship at a marine terminal in New York. Getty Images.

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

• VLSFO prices up in Zona Comun ($27/mt), Houston ($20/mt), Balboa ($18/mt), New York ($16/mt) and Los Angeles ($14/mt)
• LSMGO prices up in Zona Comun ($208/mt), New York ($35/mt), Los Angeles ($23/mt), Houston ($20/mt) and Balboa ($16/mt)
• HSFO prices up in Houston ($27/mt), Balboa ($24/mt), New York ($19/mt) and Los Angeles ($17/mt)

Zona Comun's LSMGO price benchmark has increased by a whopping $208/mt over the past day and is currently trading at a premium of $189/mt to Bahia Blanca in Argentina and $354/mt to Santos in Brazil.

Availability is normal at the anchorage, with lead times of around 5–6 days.

In New York, the HSFO price has increased more than the port's VLSFO price benchmark, which has slightly narrowed the Hi5 spread to $153/mt today from $156/mt yesterday.

Lead times for VLSFO and HSFO stand at 5–7 days, while LSMGO is more readily available with shorter lead times of 2–3 days.

In the US Gulf region, fog season is still ongoing and has been causing intermittent disruptions in the ports.

At the Galveston Offshore Lightering Area (GOLA), bunkering operations are expected to be delayed due to high wind gusts until 2 May, a trader said.

Brent

The front-month ICE Brent contract has gained $4.17/bbl on the day, to trade at $111.33/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has continued to trade north of $110/bbl as US-Iran negotiations remain stalled and transit through the Strait of Hormuz stays constrained.

In an interview with Fox News yesterday, US secretary of state Marco Rubio said that Washington will not accept Iran’s alleged control over the Strait of Hormuz.

“If what they [Iran] mean by opening the straits is, “Yes, the straits are open as long as you coordinate with Iran, get our permission or we’ll blow you up, and you pay us,” that’s not opening the straits,” Rubio said.

The remarks came after negotiations between Washington and Tehran were cancelled over the weekend.

Prior to the Middle East war – which is now in its eighth week – the Strait of Hormuz carried roughly 20% of the world’s seaborne crude oil flows.

“After considering the diversion of some oil via pipelines and the trickle of tankers still making it through the Strait of Hormuz, around 14m b/d [14 million b/d] of oil supply is currently disrupted,” remarked ING Bank’s head of commodities strategy Warren Patterson.

Downward pressure:

Brent’s price has felt some downward pressure from the latest positions data, as money managers and hedge funds decreased their net-long bets on ICE Brent futures over the last reporting week.

Speculators sold a little over 4,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to about 369,000 lots, according to futures and options data from ICE Futures Europe.

When speculators reduce net-long positions, prices tend to decline. Conversely, when they boost these positions, oil prices typically rise, leading to a cycle where their actions can influence oil prices and the market.

By Gautamee Hazarika and Aparupa Mazumder

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