Most benchmarks in the Americas ports have gained with Brent, and Houston's Hi5 spread has widened.

PHOTO: Aerial view of the Port of Houston, Texas. Getty Images

Changes on the day to 08.00 CDT (13.00 GMT) today:

• VLSFO prices up in Houston ($35/mt), Los Angeles ($7/mt), New York and Zona Comun ($4/mt) and Balboa ($2/mt)
• LSMGO prices up in Houston ($9/mt), Los Angeles ($8/mt) and New York ($3/mt), and down in Balboa ($7/mt)
• HSFO prices up in Los Angeles ($10/mt), Balboa ($6/mt) and New York ($1/mt), and down in Houston ($9/mt)

Houston’s VLSFO price has jumped in the past day, drawing support from a 500-1,500 mt stem for prompt delivery, which is fixed at a higher level. Meanwhile, the port’s HSFO price has dropped with downward pressure from a lower-priced stem. This has widened Houston’s Hi5 spread by $44/mt to $119/mt.

New York’s VLSFO price has also gained in the past day, but the gain has been relatively smaller compared to Houston's VLSFO gain. This has narrowed New York’s VLSFO price premium over Houston's VLSFO from $51/mt yesterday, to just $20/mt now.

Demand has picked up again in Houston this week. But VLSFO and LSMGO stems can still be secured for prompt dates. Most suppliers can offer both fuel grades within 3-4 days of lead time.

Bunker operations have been running smoothly in Argentina’s Zona Comun anchorage so far this week. However, strong winds are forecast to hit the region this evening, which could disrupt bunkering at the anchorage.

Brent

The front-month ICE Brent contract moved $0.76/bbl higher on the day, to trade at $82.71/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price drew modest support from political jitters in the Middle East, following the death of Iranian President Ebrahim Raisi on Sunday. The country’s state-owned news agency IRNA confirmed that the country will hold presidential elections on 28 June.

“The challenging geopolitical backdrop is keeping traders on edge,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Iran-backed Houthi militants in Yemen possess weapons capable of reaching the Mediterranean Sea, Bloomberg reported citing senior US defense officials. This news has elevated concerns about supply disruptions in the global oil market.

“The US said Houthis have weapons that can reach the Mediterranean Sea, raising concerns about potential strikes on shipping beyond the Red Sea and Gulf of Aden,” Hynes added.

OPEC+'s next decision on supply cuts is “also hovering over the [oil] market,” Hynes further remarked. The group is scheduled to convene early next month.

Downward pressure:

Brent futures inched lower amid growing concerns about a slowdown in global oil demand.

The US Federal Reserve (Fed) has released minutes from the latest Federal Open Market Committee (FOMC) meeting. The minutes showed that the US central bank could further tighten interest rates if inflationary pressures remain elevated.

‘Brent crude… fell sharply on the release of the Fed minutes,” Hynes added.

The Fed’s bearish remarks have weighed on the oil market’s expectation of a steady demand growth this year, as the central bank could maintain interest rates at current levels for longer than expected.

The US Energy Information Administration (EIA) reported an unexpected weekly build in US crude stocks. Commercial crude oil inventories in the US increased by 1.8 million bbls to 459 million bbls in the week that ended 17 May.

“[Brent] crude sentiment also took a knock from the EIA data showing a rise of about 1.83 million barrels in domestic crude inventories,” VANDA Insights’ founder and analyst Vandana Hari said.

By Debarati Bhattacharjee and Aparupa Mazumder

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