Americas Market Update 6 Feb

Most bunker fuel prices have recorded losses, and high wind gusts are expected to delay deliveries in Zona Comun.

IMAGE: Vessel docked in the Port of Houston in the US. Port of Houston
Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices unchanged in Balboa, and down in Zona Comun ($15/mt), Houston ($8/mt), New York ($7/mt) and Los Angeles ($5/mt)
• LSMGO prices down in Zona Comun ($23/mt), Los Angeles ($16/mt), Houston, New York ($15/mt) and Balboa ($10/mt)
• HSFO prices down in Los Angeles ($11/mt), New York, Balboa ($5/mt) and Houston ($3/mt)

Balboa's Hi5 spread has widened to $72/mt over past session, as a result of its HSFO price declining while its VLSFO price remaining unchanged.

On the other hand, Houston’s VLSFO price has declined after a lower-priced 150–500 mt stem, fixed at $439/mt, put downward pressure on the benchmark.

HSFO has tightened at the port for prompt supply, with most suppliers recommending lead times of at least a week. VLSFO and LSMGO can be delivered within 5–7 days, a source said.

Zona Comun has recorded the steepest prices declines for both VLSFO and LSMGO. Both grades are available at the anchorage within 7 days.

Rough weather conditions are expected at the anchorage between 4–9 February, with high wind gusts over 20 knots posing a risk of suspension of bunkering operations.

Brent

The front-month ICE Brent contract has lost by $0.75bbl on the day, to trade at $67.20/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude's price has found support after the US Energy Information Administration (EIA) released its latest weekly oil inventory data.

US commercial crude stocks fell by 3.5 million bbls to 420.3 million bbls in the week ending 30 January, a decline that is commonly seen as a sign of stronger demand.

Brent futures have also been buoyed by a trade agreement between the US and India, under which India has agreed to increase purchases of US oil while cutting imports of Russian crude.

If the agreement is implemented, it could prompt Moscow to curb production, tightening global oil supply, according to two analysts at ING Bank.

Downward pressure:

Oil prices have come under downward pressure as supply concerns eased and market attention shifted to the outcome of US–Iran talks expected later in the day.

Crude futures faced downward pressure “amid signs of easing supply risks. Iran confirmed that it would hold negotiations with the US, allaying concerns of US military action which could threaten oil exports from the OPEC member,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“Aside from the US–Iran talks, there is little else on the market radar to sway price sentiment, and some mixed signals in the physical market, effectively cancelling each other out,” added Vandana Hari, founder of VANDA Insights.

By Gautamee Hazarika and Tuhin Roy

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