Brent Crude Steadies Amid Economic Optimism And Geopolitical Tensions

83

America’s bunker prices have mostly gained with Brent, and rough weather conditions continue to impact bunkering in GOLA, reports Engine.

 

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

  • VLSFO prices are up in Los Angeles ($12/mt), New York ($11/mt) and Houston ($5/mt), and unchanged in Balboa
  • LSMGO prices are up in Houston ($15/mt) and Balboa ($12/mt), and down in New York ($7/mt) and Los Angeles ($1/mt)
  • HSFO prices are up in Balboa ($48/mt), unchanged in Houston, and down in Los Angeles ($26/mt) and New York ($12/mt)

Balboa’s HSFO price has risen sharply in the past day, while the port’s VLSFO grade has remained steady. This has narrowed the port’s Hi5 spread from yesterday’s $199/mt to $151/mt.

On the other hand, Los Angeles’ HSFO price has dropped steeply, while its VLSFO price has gained with Brent’s upward movement, to widen the port’s Hi5 spread above $200/mt. Los Angeles’ Hi5 spread is wider than the spreads of other major ports in the Americas.

Los Angeles’ HSFO price premium of $42/mt over Balboa’s HSFO has been erased and flipped to a $32/mt discount now.

Bunkering remains suspended in the Galveston Offshore Lightering Area (GOLA) today due to rough weather conditions. The region is experiencing gale-force wind gusts of up to 42 knots, and the weather is forecast to remain rough tomorrow as well.

Brent

The front-month ICE Brent contract moved $1.32/bbl higher on the day, to trade at $88.58/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Robust economic data from the world’s biggest oil consumers, China and the US, has supported Brent gains.

China’s manufacturing Purchasing Managers’ Index (PMI) increased 1.7% month-on-month to 50.8 in March, according to data from China’s National Bureau of Statistics (NBS). In the US, the manufacturing PMI climbed to 50.3 in March, up from 47.8 in February, as reported by the US Institute for Supply Management (ISM).

Rising PMI signals increased manufacturing activity, which could lead to increased oil consumption.

“Optimism for economic growth was bolstered by manufacturing reports from the world’s two largest economies at the start of April, providing further support for oil prices,” SPI Asset Management’s managing partner Stephen Innes said.

Yesterday, an alleged Israeli airstrike on Iran’s embassy in Damascus, Syria, resulted in the deaths of six people, including three senior Iranian military officials, as reported by state-owned news agency SANA. This recent development in the Middle East has again sparked concerns about oil supply in the region, analysts noted.

The oil market remains cautious about supply-side developments, particularly ahead of OPEC’s meeting tomorrow, where the coalition is expected to discuss production quotas for the rest of the year. “There are expectations the group will reaffirm its current supply policy,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

In addition to the current challenges posed by a stronger US dollar, the recent increase in crude inventories in the US has also affected Brent’s recent gains, according to analysts.

A stronger US dollar typically makes dollar-denominated commodities like oil less attractive to investors. The dollar has risen to near four-month highs against other currencies after strong PMI figures.

The US Energy Information Administration (EIA) reported a 3.17 million bbls rise in commercial crude oil inventories in the US to 448 million bbls on 22 March. This has marginally dampened sentiment in the oil market and exerted downward pressure on Brent futures.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: Engine