Mixed Directions in Americas Bunker Benchmarks Amidst Weather Disruptions

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Americas bunker benchmarks have taken mixed directions, and bad weather has halted bunkering in GOLA and Zona Comun, reports Engine.

 

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

  • VLSFO prices down in Los Angeles ($16/mt), Houston and Balboa ($7/mt), Zona Comun ($2/mt) and New York ($1/mt)
  • LSMGO prices up in New York ($10/mt) and Balboa ($4/mt), and down in Houston ($17/mt) and Los Angeles ($7/mt)
  • HSFO prices up in Houston ($23/mt), New York ($21/mt), Los Angeles ($18/mt) and Balboa ($4/mt)

Houston’s LSMGO prices have dropped steeply over the weekend with pressure from a lower-priced 50-150 mt stem. LSMGO prices in New York have gained with support from a higher-priced stem to widen New York’s LSMGO price premium over Houston’s from $30/mt on Friday, to $57/mt now.

New York’s HSFO price has gained heavily since Friday with support from a 150-500 mt higher-priced stem, while the port’s VLSFO price has dropped marginally. This has narrowed New York’s Hi5 spread by $22/mt to $91/mt.

Bunker deliveries have been halted in the Galveston Offshore Lightering Area (GOLA) today amid strong gale-force wind gusts. Bad weather is forecast to persist tomorrow as well, which could cause prolonged delays and bunker backlogs.

Bunkering has also been suspended in Zona Comun, as strong wind gusts are making barge deliveries difficult there. Calmer weather is forecast for later today and could allow bunker operations to resume at the anchorage.

Brent

The front-month ICE Brent contract inched $0.26/bbl higher from Thursday’s settlement price, to trade at $87.26/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have pledged to extend voluntary output cuts to the end of June this year. Oil investors are now awaiting the outcomes of the upcoming OPEC+ meeting. The coalition of oil producers is set to convene on 3 April to discuss output quotas and production levels for the rest of the year.

Russia’s Deputy Prime Minister Alexander Novak has confirmed the country’s plan to reduce crude oil production rather than exports in the second quarter of this year to adhere to OPEC+ quotas.

Tensions in the Red Sea and between Russia and Ukraine are also factors pushing Brent’s price closer to the $90/bbl mark.

Approximately 1 million b/d of Russia’s crude refining capacity is currently offline due to Ukrainian drone strikes on the country’s energy facilities, Reuters reported citing energy consultancy Energy Aspects. This situation has added upward pressure on Brent futures.

Downward pressure:

Brent’s price gains have faced some resistance due to the rise in oil inventories in the world’s top oil consuming nations, notably the US.

The US Energy Information Administration (EIA) reported a 3.17 million bbls increase in commercial crude oil inventories to 448 million bbls on 22 March.

Analysts from ING Bank noted that the “bearish” EIA report has impacted market sentiments. “The increase was predominantly driven by stronger crude imports, which grew from 6.3m b/d [6.3 million b/d] to 6.7m b/d [6.7 million b/d] over the reporting week,” they added.

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Source: Engine