Bunker prices in the Americas have mostly declined with Brent values, and bunker operations are expected to be suspended in GOLA again.

PHOTO: Harbour craft ahead of a cargo vessel in the Houston area. Port Houston

Changes on the day, to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Houston and Zona Comun ($1/mt), unchanged in Los Angeles, and down in New York and Balboa ($6/mt)
• LSMGO prices up in New York ($39/mt), Los Angeles ($8/mt) and Zona Comun ($1/mt), and down in Balboa ($17/mt) and Houston ($2/mt)
• HSFO prices unchanged in Balboa, and down in New York ($7/mt), Houston ($6/mt) and Los Angeles ($5/mt)

New York’s LSMGO price has gained the most in the past day, with support from a 150-500 mt higher-priced stem fixed for prompt delivery. Meanwhile, Houston’s LSMGO price has dropped marginally. This has widened New York’s LSMGO premium over Houston's LSMGO from $12/mt yesterday to $53/mt now.

LSMGO prices have dropped in Panama's Cristobal and Balboa. Balboa’s LSMGO price drop has been steeper amid pressure from a firm offer at a lower level. The price moves have flipped Balboa's LSMGO price from parity with Cristobal's LSMGO to a $14/mt discount now.

Due to low water levels in the Panama Canal, demand remains subdued for all bunker grades in Panama. Availability is good for all fuel grades in both Balboa and Cristobal.

Despite the sluggish demand, bunker fuel prices in Cristobal have been higher compared to Houston. As a result, one buyer opted to procure LSMGO stems from Houston rather than Cristobal due to the price discrepancy. Houston’s LSMGO is trading at a $51/mt discount to Cristobal.

Bunkering has been proceeding normally in the Galveston Offshore Lightering Area (GOLA) today. However, conditions are forecast to deteriorate again over the weekend and likely suspend bunkering again.

Brent

The front-month ICE Brent contract inched $0.04/bbl up on the day, to trade at $82.78/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Signs of an improving demand environment in China have supported Brent futures’ upward move today.

China imported about 88.31 million mt of crude oil in the first two months of this year amid strong travel demand. The country’s daily imports stood at around 10.74 million b/d, up 3.3% from 10.40 million b/d in January and February of the previous year, market intelligence provider JLC reported citing data from China’s General Administration of Customs (GACC).

“The reality is that Chinese oil demand has been much better than previously reported,” Price Futures Group’s senior market analyst Phil Flynn said.

Meanwhile, Brent also made gains as tension in the Gulf of Aden intensified. In a clear escalation of the conflict, the latest drone attack launched by Iran-backed Houthi insurgents claimed the lives of three seafarers, according to the US Central Command (CENTCOM). This recent incident has heightened geopolitical risks in the region, leading to market uncertainties and impacting oil prices.

Brent’s prices will remain elevated if the insurgency in the Red Sea continues to worsen, analysts said. “Tensions in the Middle East continue to keep traders on edge,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

The weekly US crude stock build has put some downward pressure on Brent's price today.

Commercial US crude inventories increased for the sixth consecutive week, rising by 1.4 million bbls to 448.5 million barrels in the week ending 1 March, the EIA reported.

US Federal Reserve's chief Jerome Powell has indicated that the central bank plans to reduce interest rates this year. However, the timing of these rate cuts remains uncertain due to the ongoing inflationary pressures in the country.

“We believe that our policy rate is likely at its peak for this tightening cycle,” CNBC reported US Fed chairman Jerome Powell as saying.

Higher US interest rate can reduce global demand for oil as it makes buying costlier for non-dollar currency holders.

By Debarati Bhattacharjee and Aparupa Mazumder

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