Bunker prices have mostly come off with Brent across the Americas in the past day, while Balboa’s prices have gained again.
Changes on the day to 09.30 CST (14.30 GMT) today:
- VLSFO prices up in Balboa ($5/mt), and down in New York and Los Angeles ($7/mt), Zona Comun ($4/mt) and Houston ($3/mt)
- LSMGO prices up in Houston and Balboa ($8/mt), steady in Zona Comun, and down in Los Angeles ($9/mt) and New York ($8/mt)
- HSFO380 prices up in Balboa ($10/mt), and down in Houston and Los Angeles ($6/mt) and New York ($5/mt)
Higher-priced stems of VLSFO and LSMGO have added upward pressure to Balboa’s prices, pushing them to $28-32/mt premiums over Houston, where prices have fallen.
VLSFO prices in Balboa and Houston since 1 August
Availability of the two fuels is running low with certain suppliers across Balboa and Cristobal.
Calmer weather conditions in Zona Comun has allowed bunker deliveries to go ahead, following strong winds and swell yesterday. Another round of strong winds is expected at the Argentinian anchorage location from tonight, and to last until tomorrow morning local time. Deliveries could be disrupted then.
VLSFO and LSMGO prices have been roughly unchanged in Zona Comun in the past day, with VLSFO edging lower, while not by as much as in several US ports.
Brent
Front-month ICE Brent has slipped $0.70/bbl lower on the day to 09.30 CST (14.30 GMT) today, when it traded at $78.55/bbl.
Buying interest in the futures contract has waned after doubts about demand has resurfaced with the power crunch in China and an indicative build in US crude inventories.
Chinese power plants are running low on coal, which makes up a large share of feedstock for power generation. The shortage has triggered widespread rationing and millions of household have been affected. Investment bank Goldman Sachs estimates that nearly half of China’s industrial activity could feel the crunch, and has shaved 0.40% off its GDP growth forecast for China this year, now expecting growth at 7.80%.
How this will impact oil demand in China – the world’s biggest importer – is unclear. Diesel and other fuels could replace coal as feedstock for power generation and support prices, while lower overall growth and economic activity could dent fuel demand.
Brent was trading at three-year highs of more than $80/bbl before pulling back down below that mark yesterday.
“It’s likely that profit-taking is behind yesterday’s rejection after a good rally but we may have some stagnation around this level as investors weigh up where to go next,” says DailyFX analyst Daniela Sabin Hathorn.
Brent also came under pressure after yesterday’s weekly data release from the American Petroleum Institute (API), which showed a surprise build in US crude stocks. The stocks regained 4.13 million bbls to end seven weeks of draws. The indicative API figures normally precede official Energy Information Administration (EIA) figures by a day.
Official EIA data confirmed a significant stock build when it came out today. Commercial US crude inventories rose by 4.58 million bbls to 418.54 million bbls in the week to 24 September.
The country’s crude stocks have recovered some weight after Hurricane Ida capped offshore production in the Gulf of Mexico and accelerated stock draws this month. Crude inventories bottomed out at three-year lows on 17 September.
Brent dipped $0.20/bbl lower in the minute after the data was released at 09.30 CST (14.30 GMT) today, before bouncing back up by $0.90/bbl to $79.38/bbl at 09.56 CST (14.56 GMT).