Americas Market Update 8 Dec

Bunker fuel prices showed mixed movements, and rough weather in the US Gulf continues to disrupt bunker operations.

IMAGE: A group of tankers in port along the Houston Ship Channel, Texas. Getty Images

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

• VLSFO prices up in Balboa ($8/mt), Zona Comun ($6/mt) and Houston ($2/mt), and down in New York ($10/mt) and Los Angeles ($2/mt)
• LSMGO prices up in Houston ($8/mt), and down in Balboa ($24/mt), New York ($23/mt), Los Angeles ($3/mt) and Zona Comun ($1/mt)
• HSFO prices up in Houston ($8/mt), and down in New York ($8/mt), Los Angeles ($2/mt) and Balbao ($1/mt)

Conventional fuel prices at the port of Houston have defied Brent’s downward movement and have gained across all the three grades in the past session.

Houston’s LSMGO price has risen the most but continues to be at discounts of $92/mt to New York and $90/mt to Los Angeles, making Houston a more preferable spot to offtake the grade.

Weather conditions in the US Gulf have remained rough, with dense fog across the region, especially at night and during early dawn, which has reduced visibility for ships and restricted vessel movements.

On the US East Coast, the National Oceanic and Atmospheric Administration (NOAA) has activated new Slow Zones near Cape Cod Bay, Massachusetts (MA), and east of Ocean City, Maryland (MD), after detecting endangered North Atlantic right whales.

Vessels have been asked to voluntarily limit speeds to 10 knots in these designated areas, which can lead to brief delays in bunker planning in the area, a ship agent informed ENGINE.

Brent

The front-month ICE Brent contract has lost $0.36/bbl on the day from Friday, to trade at $62.89/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has moved higher over the weekend as market participants prepare for a final interest rate cut by the US Federal Reserve (Fed).

Lower US interest rates typically boost demand by making dollar-denominated commodities, like oil, more affordable for non-dollar holders, potentially offering some upside support to prices in the medium term.

“The market is still priced for a December Fed rate cut and the continuation of the easing cycle into 2026,” SPI Asset Management managing partner, Stephen Innes, remarked.

The US central bank is set to hold its Federal Open Market Committee (FOMC) meeting over the next two days.

Downward pressure:

Oil market analysts note that the Russia-Ukraine backdrop is keeping a lid on Brent’s price gains, as Washington continues to push for an immediate peace deal.

The ceasefire could ease western sanctions on Russian energy exports, adding extra barrels to the global oil mix, according to analysts.

“The oil market has to price a very fat tail: a successful deal that leads to sanctions relief could unleash millions of “clean” barrels currently stranded in the shadow fleet,” Innes added.

However, progress in peace negotiations remain slow, with disputes over security guarantees for Kyiv, Reuters reports.

By Gautamee Hazarika and Aparupa Mazumder

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