Americas Market Update 7 May

Fuel prices have mostly moved down, and availability in Los Angeles is tight across all three fuel grades.

IMAGE: The San Pedro Bay Port Complex, US. Port of Los Angeles

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

• VLSFO prices down in Houston ($112/mt), Zona Comun ($30/mt), Balboa ($15/mt), New York (13/mt) and Los Angeles ($4/mt)
• LSMGO prices down in Houston ($51/mt), New York ($29/mt), Los Angeles, Balboa ($27/mt) and Zona Comun ($13/mt)
• HSFO prices up in Houston ($2/mt), and down in Los Angeles ($22/mt), Balboa ($14/mt) and New York ($5/mt)

Houston's HSFO price has been the outlier over the past day and gained by $2/mt, while other price benchmarks in key ports have tracked Brent down.

Houston's VLSFO price has plunged lower. A lower-priced 500–1,500 mt VLSFO stem being booked at $722/mt has put downward pressure on the benchmark.

Bunker demand is high in the US West Coast ports of Los Angeles and Long Beach, and availability is tight across all three conventional fuel grades. Lead times are currently stretched, with over a week required to secure stems, a trader tells ENGINE.

In Zona Comun, possible disruptions and prolonged delays in bunker deliveries are expected between 7-11 May. High wind gusts are forecast at the anchorage location.

Availability of VLSFO and LSMGO is tight in Zona Comun this week, with lead times extending to 8–10 days.

Brent

The front-month ICE Brent contract has lost $5.56/bbl on the day, to trade at $97.59/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent futures gained some support after the US Energy Information Administration (EIA) reported a decline in US crude stocks.

Commercial US crude oil inventories decreased by 2.3 million bbls to 457.2 million bbls in the week ending 1 May, according to data from the EIA.

“The modest draw [reported by the EIA] reflected a sharp fall in exports,” two analysts from ING Bank noted.

Yesterday, the American Petroleum Institute (API) also reported a sizeable decline of 8.1 million bbls in US crude stocks.

A decline in US crude stocks typically indicates improvement in demand for oil and can put some upward pressure on Brent's price.

Downward pressure:

Brent crude’s price has plunged on renewed hopes of a ceasefire deal between Washington and Tehran.

Iran is considering a new US proposal to end the conflict in the Middle East, the BBC reported.

“Energy markets sold off sharply… on de-escalation hopes in the Middle East,” ING Bank’s analysts said.

The news has raised hopes that oil flows through the Strait of Hormuz can gradually resume, according to market analysts.

The US proposal is “understood to include a one-page memorandum that would, if accepted by Iran, lead to a gradual reopening of Hormuz and the lifting of US restrictions on access to Iranian ports,” ING Bank’s analysts added.

By Gautamee Hazarika Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online