Americas Market Update 8 Jan

Bunker fuel price movements have been mixed, and bunker delays are expected at the Galveston Offshore Lightering Area (GOLA) until Monday.

IMAGE: Cargo vessel at the port of Galveston. Getty Images

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

• VLSFO prices up in New York ($7/mt), Los Angeles ($2/mt) and Zona Comun ($2/mt), and down in Houston ($5/mt) and Balboa ($3/mt)
• LSMGO prices up in Los Angeles ($15/mt), New York ($8/mt), Zona Comun ($3/mt) and Balboa ($1/mt), and down in Houston ($3/mt)
• HSFO prices up in New York ($8/mt) and Houston ($4/mt), and unchanged in Los Angeles and Balboa

Balboa’s VLSFO price has fallen after two lower-priced VLSFO stems of 150–500 mt and 500–1,500 mt were booked at the port at $393/mt and $399/mt, putting downward pressure on the benchmark.

Availability at the ports of Balboa and Cristobal is good, with all three conventional grades deliverable within recommended lead times of 4–7 days.

In the US Gulf Coast region, GOLA faces possible disruptions from today until 12 January due to high wind gusts and choppy sea conditions.

This is expected to cause prolonged delays in bunker deliveries, a source told ENGINE.

Los Angeles’s LSMGO price has declined by the highest margin across ports and all grades. It is currently at premiums of $3/mt over New York and $90/mt over Houston.

Demand in Los Angeles remains healthy, and all three grades are available with most suppliers within lead times of 7–8 days this week.

Brent

The front-month ICE Brent contract has gained $0.17/bbl on the day to trade at $60.90/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent's price has gained some upward momentum after the US Energy Information Administration (EIA) reported a big draw in US crude inventories.

US crude stocks fell by 3.8 million barrels in the week ending 2 January, according to the EIA weekly oil inventory report.

A drawdown in crude inventories is typically interpreted as a sign of healthy demand, lending support to Brent futures.

Downward pressure:

Reports that the US is tightening its grip on Venezuela’s oil exports have reinforced expectations of increased supply. The US seized two oil tankers linked to Venezuela in the Atlantic Ocean on Wednesday, including one sailing under the Russian flag, as part of President Donald Trump’s forceful effort to control oil movements across the Americas and pressure Venezuela’s socialist government into alignment, Reuters reported.

The development has continued to weigh on Brent futures.

“Developments around Venezuela continue to grab headlines, putting further pressure on oil prices,” two analysts from ING Bank said.

“The control that the US intends to exert over the Venezuelan oil industry also raises questions over the future of Venezuela’s membership within OPEC,” they added.

By Gautamee Hazarika and Tuhin Roy

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