Price movements have been mixed in key Americas ports, while Houston’s VLSFO price has climbed to rare premiums over other ports.

PHOTO: Cruise vessel at the Erato Street Cruise Terminal in New Orleans, US. Getty Images

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

• VLSFO prices up in Houston ($11/mt), and down in Balboa ($19/mt), Los Angeles ($5/mt), Zona Comun ($4/mt) and New York ($3/mt)
• LSMGO prices up in New York ($2/mt), and down in Los Angeles ($27/mt), Balboa ($13/mt) and Houston ($1/mt)
• HSFO prices up in Balboa ($1/mt), and down in New York ($11/mt), Los Angeles ($7/mt) and Houston ($5/mt)

Houston’s VLSFO price has come up with support from a higher-priced non-prompt 150-500 mt stem, and several high firm offers. VLSFO is now priced $22/mt higher in Houston than in New York and Balboa. The price of LSMGO has been roughly steady on the day in Houston, after a stem was fixed at around the level as yesterday’s benchmark.

Los Angeles’ LSMGO price has plunged lower and moved within $10/mt of Balboa’s, which is also down on the day. VLSFO and LSMGO grades are generally available in Los Angeles. Two suppliers can deliver with a week of lead time, but one supplier is unable to offer VLSFO and does not know when it can deliver by.

HSFO and LSMGO grades can be delivered with two days of lead time in New Orleans, but a week is generally better, a supplier says. Both VLSFO and LSMGO are priced at roughly the same levels in New Orleans as in Houston.

We are in fog season, and thick fog is forecast in Corpus Christi today and moderate fog tomorrow. Galveston, Port Arthur and Lake Charles also all have high to moderate fog warnings for today and tomorrow.

Brent

The front-month ICE Brent contract reversed the previous session’s gains by shedding $0.90/bbl on the day, to trade at $76.49/bbl at 07.00 CST (13.00 GMT).

Upward pressure:

Brent futures have gained support from expectations of strong winter fuel demand. Oil demand in January is expected to rise by 1.4 million b/d year-on-year to 101.4 million b/d, driven mainly by increased heating fuel consumption in the northern hemisphere, according to Reuters, citing JPMorgan analysts. They noted that colder-than-normal winter conditions, and an earlier start to travel in China for the Lunar New Year holidays, are boosting heating fuel usage.

Anticipations of stricter sanctions on Russian and Iranian oil firms have also lent support to oil prices. New sanctions are expected to take effect after US President-elect Donald Trump’s inauguration later this month.

“Concerns over Iranian and Russian oil flows will also be providing some support,” two analysts from ING Bank have said.

Market watchers are also worried about global supply tightening amid rising demand, further adding to Brent’s upward momentum.

Downward pressure:

Despite a drop in commercial US crude oil stocks, build-ups in gasoline and distillate stocks have exerted some downward pressure on Brent futures.

The latest data from the US Energy Information Administration (EIA) revealed an increase in gasoline and distillate stockpiles last week in the US. Gasoline inventories rose by 6.33 million bbls to 237 million bbls, while middle distillate stocks increased by 6.07 million bbls to 128 million bbls.

Oil prices declined “on the back of a bearish weekly US oil stockpiles report,” said Vandana Hari, founder and analyst at VANDA Insights.

By Erik Hoffmann and Tuhin Roy

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