Bunker prices have mostly been rangebound in the Americas, and a tropical storm is set to disrupt bunkering as it approaches Texan ports.
Changes on the day from Friday, to 09.30 CST (14.30 GMT) today:
- VLSFO prices up in Los Angeles ($14/mt) and Zona Comun ($4/mt), and down in Houston ($4/mt), New York and Balboa ($2/mt)
- LSMGO prices up in Zona Comun ($10/mt), Los Angeles and Balboa ($5/mt) and Houston ($2/mt), and down in New York ($8/mt)
- HSFO380 prices up in New York ($25/mt), Houston ($17/mt), Balboa ($4/mt) and Los Angeles ($3/mt)
Tropical storm Nicholas is expected to make landfall in Texas later today, just two weeks after Hurricane Ida pummelled Louisiana and caused widespread floods, power outages and disruptions to oil production.
The US National Weather Service (NWS) expects Nicholas to reach wind speeds of up to 70 mph when it makes landfall near Matagorda Bay in the evening local time, before moving north along the Texan coast towards Houston in the early hours of Tuesday.
Nicholas could strengthen to a hurricane before it makes landfall, the NWS warns. And heavy rains are expected to cause severe flooding across the coast.
The Coast Guard expects that inbound vessel traffic to Houston and Galveston will be suspended, according to local shipping agent Norton Lilly. Offshore activities could also be disrupted by high sea levels from the storm.
Norton Lilly says pilots in the Houston, Galveston, Texas City area will assist with sailings out of the ports in the hours leading up to the storm. Bunkering schedules face disruptions and possible delays.
Most bunker prices have been broadly unchanged since Friday, while Houston and New York’s HSFO380 prices have made sharp gains to narrow their Hi5 spreads to $84-86/mt.
That compares to a much wider spread of $134/mt in Los Angeles, where the HSFO380 price relatively weaker than in Houston and New York, and VLSFO stronger.
Brent
Front-month ICE Brent has come up by $0.52/bbl on the day since Friday, to $73.34/bbl at 09.30 CST (14.30 GMT) today.
Brent has climbed to fresh six-week intraday highs as nearly half of crude oil production in the Gulf of Mexico remains shut in, while most Louisiana refineries have normalised operations or at least restarted.
The production halt has contributed to draw commercial US crude oil inventories down to their lowest point since September 2019, data from the Energy Information Administration (EIA) showed last week. Gasoline and distillate inventories were also heavily down last week, after a week of reduced refinery production.
ExxonMobil’s 520,000 b/d Baton Rouge refinery and Marathon’s 565,000 b/d Garyville refinery – Louisiana’s two biggest – were knocked offline by Hurricane Ida two weeks ago, but have now resumed to normal operations, Argus Media reports. Four refineries in Alliance, Norco, St. Charles and Meraux have yet to restart.
With crude production lagging crude demand in the Gulf, ExxonMobil made a second 1.5 million bbl loan from the US’ Strategic Petroleum Reserves (SPR) last week to keep up production levels amid robust oil products demand.
China is also tapping into its strategic oil reserves, but not as much for a lack of product as to stave off inflationary price pressure for oil sold to its manufacturing industry. Oil from the reserves will be auctioned to domestic refiners.
OPEC shaved about 110,000 b/d of its global oil demand forecast in its latest monthly report, published today. The group now expects demand to average 99.7 million b/d, citing the persistent risk of rising Delta Covid-19 cases.
“…the increased risk of COVID-19 cases primarily fuelled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates,” OPEC said.