Americas Market Update 4 Mar

Bunker fuel prices have moved in mixed directions, and the Houston Ship Channel remains closed due to dense fog.

IMAGE: Cranes loading a container ship at a marine terminal in New York. Getty Images.

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

• VLSFO prices up in Balboa ($27/mt), unchanged in Zona Comun, and down in Los Angeles ($52/mt), Houston ($21/mt) and New York ($18/mt)
• LSMGO prices up in Balboa ($84/mt), Houston ($82/mt) and New York ($78/mt), and down in Los Angeles ($37/mt) and Zona Comun ($14/mt)
• HSFO prices up in New York ($59/mt), Balboa ($20/mt), Los Angeles ($14/mt) and Houston ($12/mt)

Houston's VLSFO price has declined after a lower-priced 500–1,500 mt stem was booked at the port, putting downward pressure on the benchmark.

Due to ongoing seasonal fog in the US Gulf Coast, the Houston Ship Channel remains closed to both inbound and outbound traffic. These intermittent closures are expected to lead to backlogs in deliveries at the terminal, a trader tells ENGINE.

Lead times at the port for HSFO and VLSFO are currently between 7–10 days, while LSMGO can be secured within 5–7 days.

New York's HSFO price has increased the most among the grades, while the port's VLSFO price has declined, narrowing the port's Hi5 spread to $87/mt from yesterday's $164/mt.

HSFO requires lead times of around 8–9 days in New York this week, while VLSFO requires around 5–6 days, a trader informs ENGINE.

LSMGO has tightened slightly but remains comparatively more available, with lead times of 2–3 days advised.

Brent

The front-month ICE Brent contract has declined by $1.34/bbl on the day, to trade at $81.10/bbl at 7.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has remained elevated amid mounting risk of supply disruptions through the ‌Strait of Hormuz – a critical chokepoint through which almost 20% of the world’s oil transits.

Several regional players have halted operations at their facilities in the region, with Iraq joining the queue most recently.

Baghdad has curtailed production from the Rumaila oil ​field by 700,000 b/d, from the West Qurna 2 oil field by 460,000 b/d and ⁠from the Maysan oil field by 325,000 b/d, Reuters reported.

Brent’s price moved higher “following reports that Iraq had cut output at the giant Rumaila oil field and appeared poised to shutter about 3mb/d [3 million b/d] of output, if the crisis persists,” ANZ Bank’s senior commodity strategist Daniel Hynes wrote.

A fire at storage facilities at the UAE port of Fujairah led to some operation shutdowns yesterday. Fujairah is one of the largest oil export hubs near the Strait of Hormuz.

The “sprawling conflict” adds further concerns to the escalating security risks for energy infrastructure across the Persian Gulf region, Hynes said.

Downward pressure:

Brent’s price has felt some downward pressure after the American Petroleum Institute (API) reported a surge in US crude stocks.

US crude oil inventories gained by 5.6 million bbls in the week ending 27 February, according to the API.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure Brent's price.

Official inventory data from the US Energy Information Administration (EIA) will be released later today.

By Gautamee Hazarika and Aparupa Mazumder

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