Americas Market Update 4 Nov

Bunker prices have generally trended lower, and demand has been strong in New York.

IMAGE: Aerial view of Port Newark. Getty Images

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

• VLSFO prices down in Zona Comun ($79/mt), Houston ($40/mt), Los Angeles ($39/mt), Balboa ($17/mt) and New York ($5/mt)
• LSMGO prices up in Zona Comun ($33/mt), and down in New York ($29/mt), Balboa ($26/mt), Los Angeles ($21/mt) and Houston ($9/mt)
• HSFO prices down in Balboa ($34/mt), Houston ($20/mt), Los Angeles ($14/mt) and New York ($9/mt)

LSMGO prices have fallen the most in New York in the past day. 50-150 mt of LSMGO has been offered in the port at $1,482/mt.

New York’s LSMGO is currently at a $164/mt premium over that in Houston. Houston’s LSMGO has been priced below New York’s for almost eight months, since it last held a premium on 9 March.

Bunker demand has been robust in New York and is expected to stay strong through the end of the year. VLSFO and LSMGO availability is good this week, with lead times of 2-3 days. HSFO is tighter and needs at least six days for delivery, a source said.

Calm weather is expected at New York through Friday, keeping conditions favourable for bunker deliveries, a trader told ENGINE.

Brent

The front-month ICE Brent contract has lost $3.26/bbl on the day, trading at $101.70/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has found support from an unexpected draw in US crude stocks and fresh clashes between the US and Iran.

US crude oil inventories fell by 5.3 million bbls in the week ending 30 October, according to estimates from the American Petroleum Institute (API).

A decline in US crude stocks usually signals stronger demand and can offer support to Brent’s price.

Washington has attacked an Iranian anti-aircraft facility on Qeshm Island near the Strait of Hormuz, ANZ Bank’s senior commodity strategist Daniel Hynes said.

Effective throughput of oil through the Strait of Hormuz has fallen to 56% of pre-conflict levels “and is trending lower”, Hynes added.

Downward pressure:

Brent’s price has come under downward pressure amid signs that the US is not planning an imminent return to major combat with Iran.

US President Donald Trump told the Financial Times yesterday that Washington had no immediate plans to strike Iran.

This week’s strikes on Qeshm Island appeared limited and did not signal a return to major combat operations, Reuters reported, citing a US official.

Trump’s comments came as his Republican Party lost control of both houses of Congress in yesterday’s US midterm elections – a vote the global oil market had been watching closely, after the US President threatened to resume strikes on Iran once it was over.

By Gautamee Hazarika and Aparupa Mazumder

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