Americas Market Update 9 Oct

Fuel prices have mostly declined, and rough weather conditions are expected to suspend bunkering operations in GOLA.

IMAGE: A ship being loaded with fuel moored along the Buffalo Bayou, just east of downtown Houston. Getty Images

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

• VLSFO prices down in Zona Comun ($23/mt), Los Angeles ($15/mt), New York ($8/mt), and Houston and Balboa ($4/mt)
• LSMGO prices up in Balboa ($5/mt), and down in Zona Comun ($61/mt), Los Angeles ($29/mt), Houston ($17/mt) and New York ($14/mt)
• HSFO prices up in Houston ($5/mt), and down in Los Angeles ($7/mt), Balboa ($5/mt) and New York ($3/mt)

Houston's VLSFO price has declined by $4/mt over the past day. Two lower-priced 150-500 mt VLSFO stems have been fixed at the port at $705/mt and $713/mt, which may have weighed on the benchmark.

Meanwhile, the port's HSFO price has gained despite a dip in Brent crude prices. These opposing price movements have narrowed Houston's Hi5 spread to $191/mt today from $200/mt on Thursday.

Bunker demand in Houston has been slightly down over the week, and prompt availability of all three conventional fuel grades is tight. Suppliers are recommending at least five days of lead time, a trader said.

In the Galveston Offshore Lightering Area (GOLA), high seas are expected to suspend bunkering operations at the anchorage today. LSMGO can be made available with 4-5 days of lead time, and HSFO and VLSFO require at least seven days, a source tells ENGINE.

Brent

The front-month ICE Brent contract has lost $1.31/bbl on the day, trading at $103.15/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price is poised to end the week higher, with an increasing number of vessels coming under attack this week and Washington renewing its focus on Tehran’s shadow tanker fleet.

On Wednesday, an oil tanker was struck by multiple unknown projectiles within the Strait of Hormuz, resulting in casualties, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

“The pace of attacks on oil tankers in the Strait of Hormuz increased in recent days, with the UK Maritime Trade Operations reporting nine attacks in the waterway so far this month,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

To add onto the pressure, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) targeted 17 more shadow fleet vessels, that allegedly continue to evade US sanctions by transporting Iranian petroleum and petrochemicals.

Downward pressure:

US President Donald Trump said Washington would not launch any new attacks on Iran before the US midterm elections in November.

“We will not be attacking Iran ​at any time prior to the midterm elections to be held in ​the United States on November 3rd,” Trump wrote on social media platform Truth Social.

Brent crude’s price rose 6% in the previous session before giving back some of those gains following Trump’s statement, Hynes said.

Some improvement in oil exports out of the Middle East has also put downward pressure on Brent’s price today.

Kuwait is producing at 75% of pre-war levels, while Saudi Arabia has reduced the official selling price (OSP) of the Arab Light to Asia for November loadings. Iraq is hiring additional vessels to send oil through the Strait of Hormuz.

By Gautamee Hazarika and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online