Bunker benchmarks in Americas ports have gained, and demand has gone up in the East Coast port of Newport News, reports Engine.
Changes on the day, to 08.00 CDT (13.00 GMT) today:
- VLSFO prices up in Zona Comun ($14/mt), Houston ($9/mt), New York (5/mt), Los Angeles ($3/mt) and Balboa ($3/mt)
- LSMGO prices up in Zona Comun ($20/mt), Balboa ($16/mt), Houston ($15/mt), Los Angeles ($9/mt) and New York ($5/mt)
- HSFO prices up in Los Angeles ($23/mt), New York ($10/mt) and Houston ($2/mt), and down in Balboa ($6/mt)
Demand for bunker fuel at the East Coast port of Newport News has surged significantly. This spike can be attributed to the channel closure in Baltimore following the collapse of the Francis Scott Key Bridge last week, a source says.
As a result, the price of LSMGO in Newport News has soared by $77/mt since yesterday. A 50-150 mt LSMGO stem with prompt delivery has been fixed at a higher price in the past day.
New York has also experienced an uptick in demand. However, due to the port’s good bunker availability, the increase in bunker fuel prices has been marginal. This has led to the widening of Newport News’ LSMGO price premium over New York from $6/mt yesterday, to $78/mt now.
Trading sources anticipate further price escalations in East Coast ports if supply challenges persist in Baltimore.
Strong wind gusts are forecast to disrupt bunkering in New York later today. Delays and backlogs are expected, and standby tugboats may be required for barge deliveries, a source says.
Tugs in New York will typically drop barges off by receiving ships and leave. But when you have high winds, tugs will stay with receiving ships the entire time to ensure that everything stays in place, and they charge extra for this.
Bunker operations remains suspended in the Galveston Offshore Lightering Area (GOLA) due to strong wind gusts of up to 48 knots. Operations are expected to resume with calmer weather from this evening.
Brent
The front-month ICE Brent contract has moved $1.08/bbl higher on the day, to trade at $89.66/bbl at 08.00 CDT (13.00 GMT) today.
Upward pressure:
Brent futures surged close to $90/bbl, in response to news about a fire incident at Russia’s third-largest refining company Tatneft’s refinery.
The Mayor of Nizhnekamsk, Ramil Mullin, confirmed the news on his Telegram channel, stating that a Ukrainian drone attacked Tatneft’s Taneco refinery. The news has sparked fresh supply concerns in the global oil market.
The Taneco refinery complex, with a crude processing capacity of 340,000 b/d, had its primary unit, processing around 155,000 b/d, hit in the attack.
Additionally, tensions in the Middle East escalated after Iran accused Israel of an airstrike on its embassy in Damascus, resulting in the deaths of three Iranian military officials.
Saxo Bank’s APAC strategy team highlighted Iran’s vow of retaliation, stating, “Iran vowed revenge on Israel for an airstrike on its embassy in Syria, which raises risks to oil supplies.”
The market is closely watching these developments ahead of OPEC’s Joint Ministerial Monitoring Committee (JMMC) meeting today to discuss output levels for the remainder of the year.
Downward pressure:
Members of the OPEC+ ministerial panel are unlikely to alter the group’s output policy for the remainder of the year at today’s meeting, Reuters reported citing five sources.
There’s a risk that Brent futures could reverse recent gains if Saudi Arabia, OPEC’s de-facto leader, and its allies, led by Russia, choose not to extend the current supply cuts of 2.2 million b/d beyond June.
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Source: Engine
