Most major US and Latin American bunkering locations have seen prices rise with Brent in the past day, while Houston’s VLSFO price has come off slightly.
Changes on the day to 09.30 CST (14.30 GMT) today:
- VLSFO prices up in Balboa ($9/mt), New York and Los Angeles ($8/mt) and Zona Comun ($7/mt), and down in Houston ($3/mt)
- LSMGO prices up in Balboa ($13/mt), Houston ($11/mt), New York and Los Angeles ($10/mt) and Zona Comun ($3/mt)
- HSFO380 prices up in Houston, New York and Los Angeles ($7/mt) and Balboa ($3/mt)
Houston’s VLSFO price has dipped under pressure from a lower-priced 500-1,500 mt stem.
LSMGO has been stemmed in a wide $57/mt range in Houston in the past day. At the higher end of the price range Houston’s LSMGO has been fixed considerably above several stems in regional ports such as Galveston and New Orleans. But the high end of New Orleans’ range is even higher than Houston’s.
All bunker fuel grades remain dry in Cristobal. Without any immediate prospects for resupply, demand has shifted to Balboa and put prompt supplies there under pressure. Two HSFO cargoes are expected to arrive in Balboa from Ecuador today, according to vessel tracking.
Balboa’s VLSFO price has sprung up to $18-22/mt premiums over Houston and New Orleans.
VLSFO is also tight with certain suppliers in Zona Comun, some of which have their earliest delivery date six days out.
Strong winds have disrupted bunkering at the Zona Comun anchorage this week. The winds are forecast to calm today and should allow suppliers to work through backlogs.
Brent
Front-month ICE Brent has climbed $0.72/bbl higher in the past day, to $84.79/bbl at 09.30 CST (14.30 GMT) today.
The futures contract hit $85/bbl today for the first time in three years and is on track for a 3% weekly gain. Tightening global oil supplies, accelerated by power plants switching from coal and natural gas, has propped up Brent.
The US Energy Information Administration (EIA) estimates that the energy crunch could pull 500,000 b/d of oil-based fuels such as fuel oil and diesel to power plants. The oil market will be in a deficit of 700,000 b/d until January, before monthly incremental OPEC+ supply increases will close some of that gap, the EIA said.
OPEC+ members have reiterated that they will stick to their plan of increasing output by 400,000 b/d per month to April next year, defying calls to cool prices by pumping more.
Brent has seen some headwind from a surprise build in US crude inventories this week. The country’s stockpiles added 6.09 million bbls in the week to 8 October, when they reached a seven-week high of 426.98 million bbls.
Technical indicators indicate that Brent is in overbought territory and could retreat by as much as $5-8/bbl, according to OANDA market analyst Jeffrey Halley.
“Any sell-off will be as short in duration as the fall, should it occur. Looking at the price action today though, it seems that oil could remain in heavily overbought territory for a few sessions yet,” he says.