Americas Market Update 9 Dec

Bunker fuel prices have moved in mixed directions, and high wind gusts in Zona Comun can lead to brief delays at the anchorage.

IMAGE: Boats docked at the Marina on Galveston Island. Getty Images.

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

• VLSFO prices up in New York ($12/mt) and Los Angeles ($5/mt), and down in Zona Comun ($6/mt), Houston ($2/mt) and Balboa ($1/mt)
• LSMGO prices up in Los Angeles ($11/mt), and down in Houston ($13/mt), New York ($12/mt), Balboa ($10/mt) and Zona Comun ($8/mt)
• HSFO prices up in Los Angeles ($9/mt) and New York ($2/mt), and down in Balboa ($33/mt) and Houston ($15/mt)

Los Angeles has been the only port among the major bunkering hubs where LSMGO price has gained over the past day, defying both the broader market trend and the downward movement in Brent.

This price uptick has put Los Angeles back at a $21/mt premium to New York, reversing the $3/mt premium that New York held over LA yesterday.

New York’s LSMGO had traded at a consistent premium to Los Angeles for the past two weeks, since 22 November, before the spread reversed today.

In New York, suppliers report steady demand for HSFO and VLSFO, and availability has been tightening for both grades. VLSFO stems typically require around 5 days of lead time, while HSFO can take up to 8 days, a source said.

In Zona Comun, prices have declined for both VLSFO and LSMGO. Weather conditions at the port remain calm but are expected to worsen, with strong wind gusts forecast at the anchorage.

This could delay bunker barge deliveries and schedules, a source said. Lead times are currently stretching to around 7–8 days.

Brent

The front-month ICE Brent contract has lost $0.28/bbl on the day, to trade at $62.61/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

The US Federal Reserve’s (Fed) ongoing two-day policy meeting has drawn market attention and put some upward pressure on Brent crude’s price today.

Oil market analysts are pricing in an 87% probability of a 0.25% cut in US interest rates, Reuters reported.

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.

“The Fed’s preferred inflation gauge is finally coming through the pipe,” SPI Asset Management partner Stephen Innes said, adding that the oil market still expects another rate cut for this year.

The US central bank will conclude this year’s final Federal Open Market Committee (FOMC) meeting tomorrow.

Downward pressure:

Brent futures have come under downward pressure following the resumption of crude flows at Russian oil company Lukoil’s West Qurna-2 oilfield in Iraq yesterday, Reuters reported.

A leak prompted a temporary shutdown at the 460,000 b/d oilfield, though repairs were completed the same day.

Besides, oil prices came under pressure amid ongoing talks in the Russia-Ukraine peace deal.

Ukraine will share a revised ceasefire plan with Washington after holding talks in London between President Volodymyr Zelensky and other leaders from France, Germany and the UK, Reuters reported.

“[Oil market] traders wait for more clarity on a peace deal between Russia and Ukraine,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

Analysts claim that a ceasefire could relax Western sanctions on Russian energy, bringing additional barrels to the global market.

“The outcome of current negotiations could have a big impact on the oil market,” Hynes added.

By Gautamee Hazarika and  Aparupa Mazumder

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