Prices are sharply down across bunker fuel grades in the Americas, and availability has tightened further in Zona Comun.
Changes on the day to 09.30 CST (14.30 GMT) today:
VLSFO prices down in Zona Comun ($27/mt), New York ($23/mt), Los Angeles ($21/mt), Balboa ($15/mt) and Houston ($13/mt)
LSMGO prices down in Los Angeles ($28/mt), Balboa and Zona Comun ($24/mt), Houston ($12/mt) and New York ($10/mt)
HSFO380 prices down in Los Angeles ($23/mt), Houston ($18/mt), New York ($16/mt) and Balboa ($2/mt)
Tight HSFO380 supply in the Houston area keeps supporting prices against other ports in the Americas. Houston’s price for the grade rose has been at rare premiums over Los Angeles, New York and Norfolk, as well as Panamanian and Ecuadorian ports, since last week.
US Gulf Coast fuel oil inventories were drawn in last month, according to Energy Information Administration (EIA) data. The inventories fell to 18-month lows in the middle of July amid surging US demand and fewer imports. A slight rebuild was recorded in the week ending 23 July.
Bunkering was delayed by rough weather in Zona Comun last week. Calmer weather from Thursday last week has allowed suppliers to work through some backlogs, but availability remains under pressure and a supplier’s earliest delivery date has been pushed back to nearly two weeks ahead.
Despite tighter supply, Zona Comun’s VLSFO price has fallen against Brazilian ports further north along South America’s eastern coast. Its price has flipped to $19-21/mt discounts to Rio Grande and Paranagua.
Port workers in Bahia Blanca and Necochea returned to work on Saturday to end a two-day strike. Argentina’s National Stevedores Union called the strike because of “internal conflict between different factions within the National Union,” shipping agency Antares said.
Separately to this strike, Argentinian truck drivers continue to block access to both Bahia Blanca and Necochea, demanding that tariffs should be updated to keep up with runaway inflation of 50% in the country. The blockage prevents cargo from reaching the ports’ storage terminals. Cargo loadings onto ships will continue from the terminals until inventories are depleted.
Brent
The ICE Brent October futures contract has tumbled $2.09/bbl lower on the day from Friday, to $74.15/bbl at 09.30 CST (14.30 GMT) today.
Brent has retreated from the six-week highs it reached at the end of last week. Chinese data showing manufacturing activity at 15-month lows in July has weighed on the futures contract. The manufacturing sector is a massive consumer of fuels in the world’s second biggest oil-consuming country.
Rising Covid-19 cases in the US, China and several other large Asian countries has also put downward pressure on Brent. These countries’ fuel demand recoveries are up against the dominant and more transmissible Delta variant, which poses a particularly high threat in areas with lower vaccination coverage.