Americas bunker prices have declined further in several key locations, as Brent sheds $1/bbl in the wake of a big US crude inventory build.
Changes on the day to 09.30 CST (14.30 GMT) today:
- VLSFO prices up in Los Angeles ($3/mt), and down in Houston ($21/mt), New York and Balboa ($14/mt) and Zona Comun ($11/mt)
- LSMGO prices up in Los Angeles ($24/mt) and Zona Comun ($3/mt), and down in Balboa ($23/mt), New York ($18/mt) and Houston ($11/mt)
- HSFO380 prices up in Los Angeles ($8/mt), and down in Balboa ($13/mt), New York ($6/mt) and Houston ($2/mt)
Supply of all fuel grades remains steady in the Houston area, with no major shortages. Houston has VLSFO at significant discount to other key US Gulf Coast ports, including $17-18/mt below Galveston and New Orleans, and $33/mt below Corpus Christi.
Offshore locations at the Galveston Offshore Lightering Area (GOLA) and New Orleans Outer Anchorage (NOLA) price VLSFO $36-39/mt higher than in Houston.
US Gulf Coast residual fuel oil inventories grew considerably amid higher imports and production last week, the latest Energy Information Administration (EIA) data shows.
Gulf Coast refineries produced 65% more fuel oil than the week before. At 86,000 b/d, the region’s weekly fuel oil production surged to its highest level since April.
Los Angeles’ bunker prices have defied Brent’s downward pull by gaining on the day. The port’s VLSFO discount to Vancouver has narrowed to $7/mt, after Vancouver’s price fell on the day.
The US West Coast is heavily congested with container ships amid an influx of import containers to ports along the coast. Over 70 container ships have been anchored near the twin ports of Los Angeles and Long Beach in recent days. Waiting times for container ships arriving to unload cargo and to bunker can extend to two weeks.
Zona Comun’s VLSFO price has dropped down to discounts of $5/mt to Paranagua, and $10/mt to Rio Grande. All three locations can accommodate prompt VLSFO stems. Around four days of lead time is recommended for stems in Paranagua.
Brent
Front-month ICE Brent has extended its decline for a third consecutive day, shedding $1.04/bbl on the day to 09.30 CST (14.30 GMT), when it stood at $84.23/bbl.
Brent has dropped to two-week intraday lows following yesterday’s release of official US crude stocks data showing a bigger-than-expected build of 4.27 million bbls. Analysts polled by Reuters had expected a smaller 1.90 million-bbl build.
In other news, Iran has announced it will return to the negotiating table in November, in an attempt to revive the 2015 nuclear deal.
“We agree to start negotiations before the end of November. Exact date would be announced in the course of the next week,” political deputy of the Ministry of Foreign Affairs of Iran Ali Bagheri tweeted.
A deal could pave the way for a return of Iranian barrels to the market. When Donald Trump pulled out of the nuclear deal to reimpose sanctions in 2018, around 2 million bbls of Iranian crude and condensate was taken out of the market.
“This could provide a segway for the United States to remove sanctions, which have severely throttled Tehran’s ability to sell its oil on global markets,” DailyFX analyst Thomas Westwater commented.