Americas Market Update 30 July

Fuel prices have moved in mixed directions, and fuel availability is good in Panama.

IMAGE: An LPG tanker sailing west along the Houston Ship Channel. Getty Images

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

• VLSFO prices up in Zona Comun ($15/mt) and Balboa ($3/mt), and down in Los Angeles ($25/mt), New York ($24/mt) and Houston ($4/mt)
• LSMGO prices up in New York ($60/mt), Houston ($18/mt) and Balboa ($11/mt), and down in Los Angeles ($48/mt)
• HSFO prices up in Balboa ($3/mt), and down in Los Angeles ($29/mt), New York ($22/mt) and Houston ($10/mt)

Houston's LSMGO price has recorded an increase after a higher-priced, 150-500 mt stem, booked at $1,275/mt, put upward pressure on the benchmark.

Bunker fuel demand at the Port of Houston has been strong over the past week. Availability is decent at the port, with most suppliers recommending lead times of 5-7 days for HSFO and VLSFO.

LSMGO availability is better at the port and can be delivered within 3-4 days, a trader said.

Balboa's HSFO and VLSFO prices have both increased by the same amount over the past day, keeping the Hi5 spread unchanged at $102/mt.

Panama has good availability across all three conventional fuel grades, a source said.

At the ports of Balboa and Cristobal, HSFO and LSMGO can be delivered within 3-4 days. VLSFO requires slightly longer lead times but can be delivered in under five days.

Brent

The front-month ICE Brent contract has gained $0.29/bbl on the day, to trade at $90.05/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Renewed fighting between the US and Iran has sent Brent crude’s price higher once again.

The US Central Command (CENTCOM) has struck Iranian military sites, including missile facilities and maritime capabilities, erasing hopes of any de-escalation in the region.

Moreover, Tehran has rejected Oman’s proposal to evenly share control of the shipping lanes in the Strait of Hormuz, seeking complete control of the critical oil chokepoint, Reuters reported.

There is also news that Yemen’s Iran-backed Houthi militants plan to impose fees on commercial vessels navigating the Bab al-Mandeb Strait – another important oil transit routes in the region.

“The daily question has been whether crude can still leave the Gulf and whether the next headline will remove another few million barrels from the global supply map,” SPI Asset Management managing partner Stephen Innes noted.

Downward pressure:

While there are no immediate downward pressures acting on Brent crude’s price today, market analysts are watching closely for even the smallest hint of de-escalation in the Middle East.

Earlier this week, US President Donald Trump said that Washington and Tehran have engaged in talks and that there is a “good chance” of a peace deal.

“Even in the event of a deal, one would expect that the market will need to continue to price in a large risk premium, given that recent events have demonstrated how quickly a deal can unravel,” two analysts from ING Bank noted.

By Gautamee Hazarika and Aparupa Mazumder

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