Americas Market Update 29 July

Fuel prices across the Americas have mostly moved higher, and the National Hurricane Center has issued an advisory for Hurricane Genevieve.

IMAGE: Cargo vessel in the port of Galveston. Getty Images

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

• VLSFO prices up in Los Angeles ($38/mt), Zona Comun ($36/mt), New York ($27/mt), Houston ($21/mt) and Balboa ($16/mt)
• LSMGO prices up in New York ($93/mt), Balboa ($79/mt), Houston ($52/mt) and Los Angeles ($31/mt)
• HSFO prices up in Houston ($17/mt), New York ($16/mt) and Los Angeles ($6/mt), and down in Balboa ($13/mt)

Despite Brent's upward movement, Balboa's HSFO price has declined after a lower-priced 500-1,500 mt stem, booked at $607/mt, weighed the benchmark down.

Conversely, the Panamanian port's LSMGO price recorded gains over the past day, after a higher-priced 50-150 mt stem, fixed at $1,294/mt, pushed the benchmark up.

The Atlantic hurricane season is underway, and the National Hurricane Center has issued an advisory for Hurricane Genevieve in the Eastern Pacific.

In the US Gulf, the Galveston Offshore Lightering Area (GOLA) is expected to face weather-related delivery delays until tomorrow, a source said.

Bunkering at the anchorage is continuing on a first-come, first-served basis. VLSFO and LSMGO availability is normal, with both grades requiring 6-7 days' lead time. HSFO availability is comparatively tighter, with longer lead times expected.

Brent

The front-month ICE Brent contract has gained $3.24/bbl on the day, to trade at $89.76/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has moved higher on the back of renewed military action in the Middle East.

Iranian military has launched ballistic missiles targeting US bases in the Middle East, while US and Saudi Arabian forces carried out strikes on Iran-linked logistics and weapons sites across eastern Iraq.

The renewed combat has shattered the brief truce that had fuelled hopes of some cooling in the market, analysts said.

“These [latest] developments throw cold water on the idea of a swift de-escalation in the Persian Gulf,” two analysts from ING Bank noted.

Adding further upward pressure on Brent, the American Petroleum Institute (API) reported a surprise draw of 3.3 million bbls in US crude stocks in ​the week ​ended 24 July, Reuters reported.

A decline in US crude stocks indicates tightness in the oil market and support Brent's price rise.

Downward pressure:

Talks of de-escalation in the Middle East have capped some of Brent crude’s price rally today. Yesterday, US President Donald Trump said Washington and Tehran had engaged in talks and that there was a “good chance” of a lasting deal.

Brent crude’s price felt some downward pressure as “traders positioned for potential progress towards peace talks in the Middle East conflict,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.

By Gautamee Hazarika and Aparupa Mazumder

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