Americas Market Update 9 Sep

Fuel prices have mostly moved higher, and an advisory is in place for Tropical Storm Lowell in the Central Pacific.

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

• VLSFO prices up in Los Angeles ($49/mt), Zona Comun ($28/mt), Houston ($19/mt), Balboa ($17/mt) and New York ($16/mt)
• LSMGO prices up in Houston ($54/mt), Balboa ($35/mt), New York ($31/mt) and Los Angeles ($11/mt)
• HSFO prices up in Balboa ($15/mt), Los Angeles ($13/mt), New York ($11/mt), and down in Houston ($5/mt)

Houston's HSFO price has declined over the past day, despite Brent's upward movement. Two lower-priced, 500–1,500 mt stems, fixed between $488-505/mt, has weighed on the benchmark.

Bunker demand in Houston has been good over the past week, and prompt availability has been a bit tight across all three conventional grades.

HSFO and VLSFO require lead times of 5–7 days. For LSMGO, most suppliers have been able to deliver stems within 4–5 days, a trader said.

The hurricane season is ongoing. The National Hurricane Center has issued an advisory for Tropical Storm Lowell in the Central Pacific region.

Brent

The front-month ICE Brent contract has gained by $2.92/bbl on the day, trading at $100.64/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent crude’s price has continued to climb, surpassing the $100/bbl mark, as tensions in the Persian Gulf escalate.

The US Central Command (CENTCOM) carried out additional strikes on Iran-linked oil tankers yesterday, hitting five vessels in response to Tehran targeting a US Navy warship.

“The oil market continues to move higher this morning as the Middle East tension escalates,” two analysts from ING Bank noted.

One vessel, M/T Riesco, sank in the Gulf of Oman, CENTCOM noted.

“Recent developments only reinforce the view that we’re still some way from a restart in talks,” ING Bank’s analysts added.

Downward pressure:

While Brent’s price is under limited downward pressures today, market participants are eyeing US crude inventory data that is scheduled for release later this week.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

The crude stocks report has been delayed this week due to the US Labour Day holiday.

By Gautamee Hazarika and Aparupa Mazumder

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