Bunker prices have fallen sharply across the Americas as Brent has come down by nearly $3/bbl since Friday.
Changes on the day to 09.30 CST (14.30 GMT) today:
- VLSFO prices down in New York ($34/mt), Balboa ($26/mt), Los Angeles ($23/mt), Zona Comun ($12/mt) and Houston ($11/mt)
- LSMGO prices down in Balboa ($37/mt), Los Angeles ($25/mt), New York ($24/mt) and Houston and Zona Comun ($19/mt)
- HSFO380 prices down in Balboa ($33/mt), New York ($20/mt), Los Angeles ($17/mt) and Houston ($8/mt)
Houston’s VLSFO price has dipped below $500/mt for the first time since early June, and its discounts to New Orleans and Corpus Christi have widened to around $30/mt.
Waiting times to transit the Panama Canal grew longer when maintenance work was being performed at the canal’s east lane. The maintenance was extended by a week, to 17 July, and wating times for ships without pre-bookings can take up to 11 days.
Certain suppliers in Balboa have tight bunker availability of VLSFO and LSMGO for prompt dates. Balboa’s bunker prices have fallen by more than twice as much as in Houston, however. Its VLSFO price premium over Houston has narrowed to $20/mt, and its HSFO380 premium over Houston is down to just $2/mt.
VLSFO price drops have been steeper in Brazilian ports than at Argentina’s Zona Comun anchorage, and erased Zona Comun’s discounts to Paranagua and Rio Grande.
Brent
Front-month ICE Brent has come down by $2.98/bbl on the day since Friday, to $69.57/bbl at 08.00 GMT.
Brent has fallen to seven-week lows following an end to the OPEC+ impasse. OPEC+ agreed over the weekend it will pump 400,000 b/d more oil in each month from August to December, for a total easing of 2 million b/d of cuts made last year. The deal also includes baseline production updates that allow for higher quotas for some member states from May next year.
The group curbed output by a historic 10 million b/d last year to prop up slumping oil prices. It has since eased cuts in gradual increments while global oil demand has recovered. The supply cut deal was initially set to expire in April next year, but has now been extended to December with a three-month pause option to allow for output cuts in the event that supply-demand dynamics change.
Output negotiations stranded earlier this month when the UAE set a baseline production update as a condition for backing a deal. After weeks of sideline negotiations to salvage the group’s pact, the UAE got a concession to adjust its baseline from May 2022, along with Saudi Arabia, Russia, Kuwait and Iraq.
The rapid spread of the Delta Covid-19 variant has triggered pessimism over the near-term global oil demand outlook and also weighed on Brent.