Bunker prices have moved in mixed directions across US ports, with some taking direction from Brent to reach yearly highs.
Changes on the day from Friday, to 09.30 CST (14.30 GMT) today:
- VLSFO prices up in Balboa ($12/mt), Zona Comun ($9/mt) and Houston ($5/mt), and down in Los Angeles ($23/mt) and New York ($7/mt)
- LSMGO prices up in Zona Comun ($11/mt) and Balboa ($7/mt), and down in New York ($34/mt), Los Angeles ($13/mt) and Houston ($3/mt)
- HSFO380 prices up in Houston ($16/mt) and Balboa ($5/mt), and down in Los Angeles ($13/mt) and New York ($8/mt)
VLSFO prices are trading close to yearly highs in Houston and Balboa. Recent gains on the back of Brent and tighter bunkering availability have pushed VLSFO prices to levels not seen since the tail end of the IMO 2020 transition period.
Several suppliers have tight schedules for deliveries in offshore US Gulf Coast locations, from off Sabine or off Corpus Christi. Only certain suppliers can deliver on prompt dates.
VLSFO is in tight supply off Trinidad and Tobago, where a supplier expects replenishment towards the end of next week. A tanker carrying nearly 3,000 mt of fuel oil is bound for Trinidad’s Chaguaramas port and due to arrive on 6 November, according to vessel tracking.
VLSFO supply has tightened further in Brazil’s Belem, where the earliest delivery date has been pushed back to 5 November.
Prompt suppliers remain tight across fuel grades in Panama’s Balboa, and limited in Cristobal. A 37,000 mt low sulphur fuel oil cargo arrived in Cristobal from Houston last Friday, vessel tracking shows.
Brent
Front-month ICE Brent has surged $1.41/bbl higher on the day from Friday, to $86.48/bbl at 09.30 CST (14.30 GMT) today.
Brent has been trading above mid-$86/bbl levels today, hitting its highest point since October 2014.
Despite recent calls from the US, India and Japan to increase crude production, Saudi Arabia has doubled down on supply restraint. Saudi energy minister Prince Abdulaziz bin Salman has cautioned against possible future demand setbacks from Covid-19. On Saturday he told Bloomberg Television “We are not yet out of the woods…We need to be careful. The crisis is contained but is not necessarily over.”
“This was interpreted by the market to mean that OPEC+ will stick to cautiously adding supply after drastic cuts were made in 2020,” DailyFX strategist Daniel McCarthy says.
Brent continues to draw seasonal support from increasing heating oil demand as the winter approaches in the northern hemisphere. Demand has been bolstered by Europe and Asia’s energy crunch and more switching to oil-based products than usual.
The number of US oil and gas rigs in operation inched down by 1 to 542 last week, figures from energy services firm Baker Hughes showed on Friday. That was the first weekly drop in seven weeks. The rig count was still nearly twice as high as at the same last time year, however.
Brent values have been rising steadily on the back of recovering global demand and inventory draws since August. Demand has recovered with vaccinations, fewer restrictions on movement and revived economic activity.