Americas Market Update 28 July

Fuel prices across the Americas have mostly declined, and potential disruptions are expected in GOLA through the end of the week.

IMAGE: Container ship near Houston. Port Houston

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

• VLSFO prices up in New York ($28/mt) and Zona Comun ($23/mt), and down in Houston ($43/mt), Balboa ($28/mt) and Los Angeles ($5/mt)
• LSMGO prices up in Houston ($18/mt), and down in Balboa ($78/mt), New York ($51/mt) and Los Angeles ($33/mt)
• HSFO prices down in Houston ($57/mt), Balboa ($29/mt), Los Angeles ($19/mt) and New York ($17/mt)

Key ports in the Americas, have recorded declines in their LSMGO prices, tracking Brent's downward movement, barring Houston.

Houston's LSMGO price has gained over the past session, after a higher-priced, 150-500 mt LSMGO stem, booked at $1,200/mt, pushed the benchmark up.

At the Port of Houston, bunker demand has been up over the past week, and availability of all three conventional fuel grades is normal, a trader said.

Recommended lead times for VLSFO and HSFO are 5-6 days, while LSMGO is available from most suppliers in around 3-4 days.

In the Galveston Offshore Lightering Area (GOLA), bunkering operations are expected to face disruptions due to swell conditions through 30 July, a source said.

Brent

The front-month ICE Brent contract has lost $4.35/bbl on the day, to trade at $86.52/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has felt some upward pressure as security threats in the Red Sea continue to impact Middle East energy flows.

Yemen's Iran-aligned Houthi militant group said it will maintain its blockade and continue targeting Saudi Arabia-linked oil tankers attempting to transit the Bab al-Mandeb Strait.

“There are still concerns over vessel movements through the Bab el-Mandeb Strait, putting Saudi oil exports from the Red Sea at risk,” two analysts from ING Bank noted.

Riyadh is highly dependent on this alternative route, funnelling about 70% of its crude exports through the Red Sea port of Yanbu to circumvent the Strait of Hormuz.

“When it comes to the Houthis, the risk is not isolated to Saudi shipments, but also to Saudi oil infrastructure,” ING Bank’s analysts said.

Downward pressure:

Brent futures have sold off heavily as the US and Iran continue to refrain from launching further strikes against each other.  

US President Donald Trump said Washington and Tehran have resumed talks and that there is a "good chance" of reaching a deal.

“US President Donald Trump said that he decided to pause the strikes to give negotiations another chance,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

This sell-off was further exacerbated by reports that oil loadings have resumed at the Caspian Pipeline Consortium (CPC) terminal on Russia’s Black Sea coast.

Oil loadings have resumed at both the CPC terminal and the Sheskharis terminal in Russia, according to ING Bank’s analysts.

By Gautamee Hazarika and Aparupa Mazumder

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