Americas Market Update 4 Dec

Bunker prices have mostly tracked Brent down, and the Sabine Neches waterway reopened to traffic this morning.

IMAGE: The Sabine Neches waterway near Port Arthur. Wikimedia Commons

Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Houston ($3/mt) and New York ($1/mt), unchanged in Los Angeles, and down in Zona Comun ($9/mt) and Balboa ($5/mt)
• LSMGO prices down in Los Angeles ($8/mt), Zona Comun ($7/mt), New York ($6/mt), Houston ($4/mt) and Balboa ($2/mt)
• HSFO prices down in Los Angeles ($11/mt), Balboa ($4/mt), Houston ($3/mt) and New York ($1/mt)

Prices for both HSFO and LSMGO have declined across key hubs over the past day, and Los Angeles has recorded the sharpest drops.

Los Angeles’ LSMGO price has moved to a $20/mt discount to New York's, coming from a $36/mt premium held a month ago.

Demand in Los Angeles has remained decent this week, and all three grades are available with lead times of 5–7 days.

The Sabine Neches waterway reopened at 07.30 local time this morning, after traffic was suspended on Tuesday to install a dredge pipeline.

The US Gulf Coast has entered the fog season. Visibility is reduced in the Houston–Galveston area and this has restricted vessel movements, especially at night, a source said.

Bunker fuel demand in Houston has remained stable despite adverse weather conditions. Lead times for all three conventional grades are around 7–8 days.

Houston’s VLSFO price has gained $3/mt on the day, while its HSFO price has fallen by $3/mt, bringing the port’s Hi5 spread to $62/mt today.

The port's Hi5 spread has recovered from a low of $12/mt on 22 October, which was the slimmest in two years.

Brent

The front-month ICE Brent contract has lost $0.12/bbl on the day, to trade at $63.04/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Oil prices rose after Ukrainian strikes on Russia’s oil infrastructure raised concerns about supply disruptions and as stalled peace talks dampened hopes of a deal that could bring more Russian crude back to global markets.

Ukraine targeted the Druzhba pipeline in Russia’s Tambov region—its fifth strike on the route supplying Hungary and Slovakia—according to a Ukrainian military intelligence source cited by Reuters.

Prices were also supported by the sense that peace negotiations were going nowhere. US President Donald Trump’s team left discussions with the Kremlin without progress on ending the war, and Trump told reporters it remained uncertain what happens now, Reuters reported.

“Crude oil gained as talks between Russia and Ukraine fail to deliver a peace deal,” said ANZ Bank senior commodity strategist Daniel Hynes.

Brent futures slipped, as “US-led Ukraine peace efforts drag on and the market lacks a clear signal on how or when they might conclude,” noted Vanda Insights’ founder Vandana Hari.

Downward pressure:

Brent crude has come under slight downward pressure after the latest weekly report from the US Energy Information Administration (EIA).

The EIA said commercial US crude inventories rose by 574,000 bbls to 428 million bbls for the week ending 28 November. An increase of this kind usually signals softer demand, which can weigh on Brent prices.

By Gautamee Hazarika and Tuhin Roy

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