Americas Market Update 9 Jun

Fuel prices have moved in mixed directions, and high sea conditions are expected to cause delays off Trinidad.

IMAGE: Container ship docked in the Port of Balboa. Getty Images

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

• VLSFO prices up in Zona Comun ($24/mt) and New York ($5/mt), and down in Balboa ($44/mt) and Houston ($18/mt)
• LSMGO prices up in New York ($11/mt) and Houston ($10/mt), and down in Balboa ($54/mt)
• HSFO prices up in New York ($4/mt) and Balboa ($2/mt), and down in Houston ($3/mt)

Houston's VLSFO price has decreased after a lower-priced 500-1,500 mt VLSFO stem was booked in the port at $729/mt.

The port's LSMGO price has increased after a 50-150 mt LSMGO stem was booked at $1,083/mt, putting upward pressure on the benchmark.

Fuel demand in Houston is strong across all three conventional fuel grades. Availability is tight for prompt deliveries this week, with HSFO and VLSFO requiring 8-10 days of lead time, while LSMGO can be delivered within 5-7 days.

VLSFO prices have fallen the most in Balboa, while the port's HSFO price has increased only slightly over the past day. These price movements have narrowed the port's Hi5 spread to $35/mt today.

Off Trinidad, bunker deliveries face disruptions from high wind gusts and rough sea conditions. This could result in delivery delays between 9-13 June, a trader said.

Brent

The front-month ICE Brent contract has lost by $1.92/bbl on the day, trading at $92.77/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has continued to trade well above $90/bbl following escalations in the Middle East.

Yemen-based Houthi militants have warned of a “complete and total” blockade of all Israel-linked vessels transiting the Red Sea. The group has also claimed responsibility for airstrikes near Tel Aviv.

The announcement risks choking another export artery beyond the Strait of Hormuz – a conduit that Saudi Arabia has relied heavily on.

The OPEC-producer has been using its East-West Pipeline and Red Sea terminal at Yanbu to export more than 4 million b/d, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

“Iran also warned that it would target oil and gas facilities linked to Israel, the US and their allies in the region if the attacks on its own infrastructure continue,” Hynes said.

Downward pressure:

Brent’s price rally has stalled following reports that Israel has agreed to hold off on attacking Iran for the time being.

Israeli Prime Minister Benjamin Netanyahu said the Israel Defense Forces (IDF) will refrain from attacking Iranian sites “for now,” the BBC reported.

Subsequently, Iranian officials also agreed to stop missile strikes targeting Israel, the report added.

“The relief [in Brent’s price] came because crude did not turn into the full geopolitical bonfire traders had feared,” SPI Asset Management managing partner Stephen Innes said.

Speaking to the Financial Times yesterday, US President Donald Trump insisted that US-Iran diplomatic efforts are proceeding as planned, dismissing concerns that Sunday’s hostilities between Iran and Israel would derail them.  

 “After surging higher on fresh Middle East escalation, oil was pulled lower by headlines suggesting Iran had ended military operations against Israel,” Innes added.

By Gautamee Hazarika and Aparupa Mazumder

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