Americas Market Update 9 Mar

Fuel prices have surged across key ports in the Americas, and fog-induced channel closures have caused delays at several areas in the US Gulf.

IMAGES: Container ship crossing over the Miraflores locks at the Panama Canal. Getty Images.

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

• VLSFO prices up in Houston ($214/mt), Zona Comun ($213/mt), Balboa ($149/mt), Los Angeles ($139/mt) and New York ($117/mt)
• LSMGO prices up in Houston ($326/mt), Balboa ($239/mt), Zona Comun ($237/mt), New York ($205/mt) and Los Angeles ($204/mt)
• HSFO prices up in Los Angeles ($129/mt), Houston ($97/mt), Balboa ($89/mt) and New York ($86/mt)

Fuel prices across all ports have tracked Brent's upward jump, recording gains in the past session.

The port of Houston has recorded the highest increases for VLSFO and LSMGO, with prices rising by more than $200/mt for both over the weekend.

Availability at the port is tight for all three conventional grades. VLSFO and HSFO are tight for prompt delivery and require lead times of at least 7–10 days. LSMGO can be delivered by most suppliers within 5–7 days.

Additionally, due to the ongoing fog season, reduced visibility in the region has caused intermittent closures of the Houston Ship Channel and the Sabine-Neches Channel.

This has resulted in several areas in the US Gulf region experiencing major delays due to fog-related channel closures, a source said.

Balboa's VLSFO price has jumped to $60/mt higher than the port's HSFO price, widening the Hi5 spread to $189/mt today.

In Panama, bunker demand has increased significantly over the past few weeks. Supply at the ports of Balboa and Cristobal is currently tight across all three conventional fuel grades and requires lead times of at least five days, a bunker trader told ENGINE.

Brent

The front-month ICE Brent contract has increased by $15/bbl on the day from Friday, to trade at $103.62/bbl at 7.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has climbed above $100/bbl as the conflict in Iran continues to show no signs of de-escalation.

Oil prices could move higher to as much as $150/bbl if the highly critical Strait of Hormuz remains closed to tankers, Qatar’s Energy Minister Saad al-Kaabi said in an interview with Financial Times.

“Oil prices are surging after Qatar’s Energy Minister has issued dire warnings that is sending shockwaves through global energy markets,” Price Futures Group’s senior market analyst Phil Flynn said.

There is also news that finance ministers from the G7 group of developed countries will discuss a joint release of oil from emergency reserves coordinated by the ​International Energy Agency (IEA).

“No signs of de-escalation in the war means the market is having to aggressively price in a prolonged supply disruption,” two analysts from ING Bank noted.

Downward pressure:

The total number of rigs drilling for crude oil in the US rose by four to 411 units last week, according to Baker Hughes.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Gautamee Hazarika and Aparupa Mazumder

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