Americas bunker prices continue to rise with support from Brent, but none more so than Vancouver’s, which have surged after a storm cut off resupply lines.
Changes on the day to 08.30 CST (14.30 GMT) today:
- VLSFO prices up in Los Angeles and Zona Comun ($8/mt), Houston ($7/mt) and New York ($5/mt), and down in Balboa ($21/mt)
- LSMGO prices up in Los Angeles ($12/mt), Houston ($10/mt), Zona Comun ($9/mt), New York ($6/mt) and Balboa ($4/mt)
- HSFO380 prices up in Los Angeles ($8/mt), Houston, New York and Balboa ($4/mt)
Los Angeles’ bunker prices have made significant gains for a second day, with delivery schedules filling up fast for dates towards the end of the month. But Los Angeles’ gains have still been outpaced by surging levels in Vancouver.
Fuel availability is limited in Vancouver, with only one in two suppliers offering fuels after a storm crippled resupply infrastructure two weekends ago. Supply issues could persist for some time as a key pipeline supplying the port city with oil remains offline.
Non-prompt VLSFO and LSMGO stems have been fixed at considerably higher levels in Vancouver in the past day, lifting its premiums over Los Angeles to $84/mt and $65/mt, respectively. The two ports can often compete on price, but Vancouver’s recent weather issues has inflated its values.
US fuel oil inventories fell by 1% in the week to 19 November, when they stood at 27.52 million bbls, according to the Energy Information Administration (EIA). Lower production and draws in the East Coast and Midwest regions pulled the country’s total stocks down.
Brent
Front-month ICE Brent has extended its rise by $1.17/bbl on the day, to $81.99/bbl at 08.30 CST (14.30 GMT).
The futures contract is trading at eight-day intraday highs today after a US-led release of emergency oil reserve volumes undershot analyst expectations and possibly trigger a response from OPEC+.
The US will release 50 million bbls from its Strategic Petroleum Reserves (SPR) in an effort to dampen fuel prices and runaway inflation. India and the UK have gotten behind the US reach-out by committing smaller volumes of 5 million bbls and 1.5 million bbls, respectively.
Japan said today it will release “several million barrels”, according to Argus Media. South Korea are also looking at to release some stocks, with details to be confirmed. China will release an undisclosed volume on its own terms, not willing to confirm whether it will be part of a joint effort.
A joint release was widely viewed as priced in by traders before the US announcement yesterday.
“The SPR noise over the last few weeks has been successful in seeing the market trade lower…Had it not been for this noise, it’s likely that the market would have continued to trend higher,” ING commodity strategists Warren Patterson says.
All eyes are now back on OPEC+ and whether the group will respond to the SPR release by holding back barrels during its next monthly output policy meeting on 1-2 December.
“The release of oil reserves is likely to see OPEC adjust its planned increases in output,” ANZ commodity strategist Daniel Hynes says.
Several OPEC+ delegates have told Argus Media and S&P Global Platts the US release is unlikely to change the group’s current course. Three OPEC+ sources told Reuters today there are no ongoing discussions to limit output increases.