Americas Market Update 27 Nov 2023
Most bunker prices in the Americas have come down with Brent, and bunker operations have been suspended in GOLA.
PHOTO: A vessel moving into Galveston Bay from the Gulf of Mexico. Getty Images
Changes on the day from Friday, to 07.00 CST (13.00 GMT) today:
- VLSFO prices down in Zona Comun ($24/mt), Balboa ($11/mt), Los Angeles ($4/mt), New York ($3/mt) and Houston ($2/mt)
- LSMGO prices down in Zona Comun ($45/mt), Houston ($16/mt), Balboa ($14/mt), New York and Los Angeles ($5/mt)
- HSFO prices down in Balboa ($7/mt), Los Angeles ($3/mt) and New York ($2/mt)
Houston has seen a rise in the number of stems fixed over the weekend. Four stems have been recorded by ENGINE, out of which two stems have been for LSMGO and two for VLSFO.
Both LSMGO stems were fixed at lower prices than Houston’s benchmark noted on Friday, pulling the benchmark lower. Meanwhile, New York’s LSMGO price made a modest price drop compared to Houston, widening its LSMGO premium over Houston from $94/mt on Friday, to $105/mt now.
Prompt VLSFO and LSMGO availability is tight in Houston and deliveries of both grades are subject to enquiry now, a source says.
Bunker operations have been suspended in the Galveston Offshore Lightering Area (GOLA) today due to rough weather conditions. The area is experiencing strong gale-force wind gusts of up to 34 knots. Calmer weather is forecast for tomorrow morning, which could allow bunkering to resume.
The front-month ICE Brent contract has moved $1.38/bbl lower on the day from Friday, to trade at $79.98/bbl at 07.00 CST (13.00 GMT) today.
The upcoming OPEC+ meeting has lent support to declining Brent prices. The remote meeting is scheduled to take place this Thursday.
The oil market expects OPEC's key producer and de facto leader Saudi Arabia to roll over its current additional voluntary output cut of 1 million b/d into the first quarter of 2024. The group’s top ally Russia is expected to extend export bans as well.
“We believe that the Saudis will roll over this cut and there is a growing possibility that we see a deeper cut from the broader group,” said two commodities market analysts at ING Bank. “In doing this, the group would provide good support to the market going into 2024,” they added.
Meanwhile, several reports suggested that the oil-producer group has made progress “in coming to a deal with Angola and Nigeria,” said ING’s head of commodities strategy Warren Patterson.
Angola and Nigeria agreeing to follow lowered production targets for 2024, backed by an additional 1 million b/d cut by Saudi Arabia, could cause a further supply shortage and push oil prices higher.
The delay in holding the joint ministerial meeting by OPEC+ producers has continued to add downward pressure on Brent’s price. Speculations about a dispute over production quotas for 2024 between Saudi Arabia and other OPEC+ producers including Angola and Nigeria have emerged as analysts said the two countries were “not happy with their lower 2024 production targets.”
Meanwhile, the International Energy Agency (IEA) projects a “slight” surplus in oil supply in 2024, even if OPEC+ producers continue to decrease supply next year, IEA’s head of oil markets and industry division Toril Bosoni told Reuters last week.
Crude analysts said that if Angola and Nigeria do not come to a deal with OPEC+, oil will face further downward pressure due to the expected surplus in the market. “Clearly, if we do not see this [production quota agreement], it would put further downward pressure on the market, given the surplus over 1Q24 [first quarter 2024],” ING Bank’s analysts added.
By Debarati Bhattacharjee and Aparupa Mazumder
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