America’s bunker benchmarks have taken mixed directions, and bad weather has halted bunkering in GOLA, reports Engine.
Changes on the day from Friday, to 08.00 CDT (13.00 GMT) today:
- VLSFO prices are up in Balboa ($15/mt), New York, and Houston ($2/mt), and down in Los Angeles ($3/mt)
- LSMGO prices are up in New York ($19/mt) and Balboa ($12/mt), and down in Los Angeles ($15/mt) and Houston ($2/mt)
- HSFO prices are up in Balboa ($11/mt) and Houston ($2/mt), unchanged in Los Angeles, and down in New York ($4/mt)
New York’s LSMGO price has gained the most over the weekend, while Houston’s LSMGO has dropped marginally with downward pressure from two lower-priced LSMGO stems fixed in a range of $14/mt over the weekend. This has flipped New York’s $11/mt LSMGO price discount to Houston on Friday to a $10/mt premium now.
Several suppliers in Houston are running low on stocks amid strong demand. Recommended lead times for LSMGO and VLSFO in Houston are between 7-9 days. HSFO requires a longer lead time of more than 10 days.
Los Angeles’ LSMGO price has dropped more than in Seattle, located further up the North American west coast, in the past day. Despite the drop, Los Angeles’ LSMGO price is still trading at a big $73/mt premium over Seattle’s.
Bunkering has been suspended in the Galveston Offshore Lightering Area (GOLA) today due to rough weather conditions. The area is experiencing strong wind gusts of up to 36 knots, making barge deliveries difficult there. The weather is expected to improve this evening.
Brent
The front-month ICE Brent contract has dropped by $0.05/bbl on the day from Friday, to trade at $85.84/bbl at 08.00 CDT (13.00 GMT) today.
Upward pressure:
Market sentiment has been influenced by recent war developments in the Middle East and Ukraine-Russia, which have kept traders on edge.
Talks of a ceasefire in the Middle East have been subdued after Israel raided two more hospitals in Gaza on Sunday. Many market participants speculated whether there could be a ceasefire last week.
Over the weekend, Moscow launched at least 57 drones and missiles targeting Ukraine’s capital Kyiv in retaliation for Ukrainian missile strikes on Russian oil infrastructure earlier this month.
“Disruptions to oil refineries in Russia have added pressure on fuel markets, leading to rising demand for available crude oil cargoes. Approximately 12% of Russia’s total oil processing capacity was impacted,” ANZ Bank senior commodity strategist Daniel Hynes said.
Global availability of crude cargoes could also see increased competition because Indian refiners now refuse to import oil carried by US-sanctioned Sovcomflot tankers.
Downward pressure:
A strengthening US dollar has limited further upside for Brent.
The recent rise in US interest rates, coupled with the Federal Reserve’s decision to maintain rates at its latest Federal Open Market Committee meeting, has bolstered the dollar’s value. A stronger dollar increases borrowing costs for non-dollar currency holders and can dampen demand for dollar-denominated commodities like Brent.
ING Bank analysts noted lower Brent futures buying last week due to a combination of factors including profit-taking at higher prices and the impact of a stronger US dollar, resulting in Brent’s price sliding back towards the $85/bbl mark.
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Source: Engine
