Americas Market Update 29 May

Fuel prices have mostly declined across major ports in the Americas, and bunker demand is strong in Los Angeles.

IMAGE: Shipping containers stacked in the Port in Los Angeles, California. Getty Images

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

• VLSFO prices down in Zona Comun ($29/mt), New York ($28/mt), Houston, Balboa ($24/mt) and Los Angeles ($4/mt)
• LSMGO prices down in New York ($61/mt), Zona Comun ($54/mt), Balboa ($41/mt), Houston ($40/mt) and Los Angeles ($26/mt)
• HSFO prices up in Los Angeles ($6/mt), and down in New York ($65/mt), Balboa ($25/mt) and Houston ($17/mt)

New York's LSMGO price has declined the most among the grade after a lower-priced 150-500 mt stem was fixed at the port at $1,144/mt, which has put downward pressure on the benchmark.

The port's HSFO price has declined after a lower-priced 150-500 mt HSFO stem was fixed for $589/mt.

New York's HSFO price is currently at a $233/mt discount to Los Angeles'.

Los Angeles' HSFO benchmark has stood out as the outlier, defying both the general market direction and Brent's downward movement, and increasing in the past day.

The port's VLSFO price has decreased, meanwhile, narrowing the West Coast port's Hi5 spread to $147/mt today, down from $157/mt yesterday.

Bunker demand is high in the ports of Los Angeles and Long Beach, and availability is a bit tight for prompt supply, a source said.

Brent

The front-month ICE Brent contract has lost by $3.77/bbl on the day, trading at $91.98/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Concerns over whether the ceasefire between the US and Iran will hold, following fresh US military strikes, have limited Brent’s decline.

“Crude oil prices rallied early in the session amid renewed skirmishes in the Middle East,” said ANZ Bank senior commodity strategist Daniel Hynes.

A closure of the Strait of Hormuz and escalating geopolitical tensions in the Middle East could push Brent prices as high as $200/bbl by the end of 2026, analysts at energy firm Wood Mackenzie estimate.

“Oil prices could reach US$200/bbl [by end of 2026] in a worst-case scenario, as more than 11 million b/d of Gulf crude and condensate supply remains curtailed,” the Wood Mackenzie report said.

Meanwhile, commercial US crude oil inventories fell by 3.3 million bbls to 441.7 million bbls in the week ending 22 May, according to the US Energy Information Administration’s (EIA) weekly oil inventory report, adding some upward pressure to prices.

Downward pressure:

Reports that the US and Iran have reached an agreement on a potential ceasefire extension have added downward pressure on oil prices.

The US and Iran agreed on Thursday to extend the ceasefire and lift restrictions on shipping through the Strait of Hormuz, according to Reuters citing sources.

“Washington nearing deal to extend Iran ceasefire, reopen Hormuz,” remarked VANDA Insights founder Vandana Hari.

“The oil market continues to edge lower amid growing optimism that the US and Iran are moving toward a deal,” two analysts from ING Bank said.

By Gautamee Hazarika and Tuhin Roy

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