Americas Market Update 4 Jun

Bunker fuel prices have recorded losses, and bunker demand is weak in New York this week.

IMAGE: The Statue of Liberty seen from New York Harbor. Getty Images.

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

• VLSFO prices down in Houston ($45/mt), Zona Comun ($28/mt), Los Angeles ($25/mt), Balboa ($24/mt) and New York ($22/mt)
• LSMGO prices down in Zona Comun ($52/mt), Houston ($42/mt), New York ($33/mt), Los Angeles ($32/mt) and Balboa ($19/mt)
• HSFO prices down in Houston ($21/mt), Los Angeles ($18/mt), New York ($16/mt) and Balboa ($14/mt)
  

Houston's VLSFO price benchmark has recorded the largest decline for the grade after a lower-priced 150-500 mt VLSFO stem, fixed at $749/mt, exerted pressure on the benchmark.

The port's LSMGO price also declined after a lower-priced 50-150 mt LSMGO stem, fixed at $1,115/mt, weighed down on the benchmark.

The port's LSMGO benchmark is currently trading at a discount of $75/mt to New York.

In New York, bunker demand has softened compared to previous weeks.

VLSFO availability is tight, with lead times stretching to 8-9 days. HSFO can be delivered within a week, while LSMGO is more readily available and requires 3-4 days of lead time, a source said.

Brent

The front-month ICE Brent contract has lost by $3.04/bbl on the day, trading at $94.94/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has felt some upward pressure after the US Energy Information Administration (EIA) reported a sizeable decline in US crude stocks.

Commercial US crude oil inventories decreased by about 8 million bbls to 434 million bbls in the week ending 29 May, according to data from the EIA.

“While inventories do fall seasonally as refiners ramp up operating rates, the pace of decline has been faster than usual,” two analysts from ING Bank noted.

The American Petroleum Institute (API) also reported a larger-than-expected draw of 6.8 million bbls a day earlier.

A decline in US crude stocks could indicate higher demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Hope of a lasting truce between Israel and Lebanon, following the US-brokered ceasefire agreement, has put downward pressure on Brent’s price today.

Under the agreement, both sides will immediately cease all hostilities. This could help achieve a broader deal with Iran, ultimately reopening the Strait of Hormuz, market analysts said.

“News that Israel and Lebanon agreed on a ceasefire could potentially open the door for talks to advance,” ING Bank’s analysts said.

By Gautamee Hazarika and Aparupa Mazumder

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