Bunker benchmarks in the Americas ports have taken mixed directions, and bunkering remains suspended in Zona Comun.

PHOTO: Container ships and jetties in Panama's Port of Balboa. Georgia Tech

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

• VLSFO prices up in Balboa ($3/mt), unchanged in Zona Comun, and down in New York ($41/mt) and Houston ($1/mt)
• LSMGO prices up in Zona Comun ($11/mt), New York and Balboa ($7/mt), and down in Houston ($21/mt)
• HSFO prices down in Houston ($6/mt)

Houston’s LSMGO price has dropped with pressure from a lower-priced stem fixed in the past day. Meanwhile, New York’s LSMGO price has gained with Brent, to widen the port’s LSMGO price premium over Houston from $13/mt yesterday, to $41/mt now.

LSMGO prices in the Americas ports have been rising steeply since July amid expectations of tightening distillates supply in the coming months. The concerns have been fuelled by renewed oil output cut pledges from Saudi Arabia and Russia. Saudi Arabia and Russia are among the world's top suppliers of medium and heavy-grade crude oils, which are better suited for distillates production than lighter grades.

LSMGO prices in major American ports like Houston, New York and Los Angeles are trading above $1,000/mt – their highest level since January.

Bunker operations have been suspended in Argentina’s Zona Comun anchorage due to rough weather conditions. The weather is forecast to remain rough throughout this week, with wind speeds forecast to intensify further and touch 35 knots on Friday. A window of calmer weather may allow bunker operations to resume for a short period between Thursday evening and Friday morning.

Brent

The front-month ICE Brent contract has moved up $0.73/bbl on the day, to trade at $95.52/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressures:

Brent futures erased the previous day’s losses as concerns about the tight global supply pushed oil prices higher today.

Saudi Arabia and Russia’s decision to extend oil output cuts into the fourth quarter of this year has prompted concerns about a supply crunch in the global market.

“Oil prices remain well supported, with ICE Brent edging closer towards $95/bbl as the market continues to become increasingly concerned over the tightness in the oil balance for the remainder of the year,” said ING’s head of commodities strategy Warren Patterson.

Commercial oil inventories in Europe, the US and Japan have made a “substantial decline”, commented SPI Asset Management’s managing partner Stephen Innes.

“This sharp downturn results from a combination of remarkably resilient global demand and substantial production cuts enforced by the OPEC+ alliance, contributing to the current bullish dynamic in oil markets,” he added.

Downward pressures:

Meanwhile, oil analysts expect the recent surge in oil prices to have a substantial impact on global inflation. Oil plays a pivotal role in major industries and with its prices on the rise, it might also influence prices for other goods and services.

“The recent surge in oil prices, which have reached a 10-month high of $95/bbl, is causing ripples across the global economy and financial markets,” said Innes.

“There's a growing concern about the potential inflationary pressures this [oil prices] could exert on the global economy, potentially leading to an unfavourable shift in the global growth/inflation balance,” Innes added.

Moreover, Saudi Aramco’s chief executive Amir Nasser has lowered the company’s outlook for global oil demand, Reuters reported. The company now expects global demand to reach 110 million b/d by 2030, lower than its previous estimate of 125 million b/d. This news has added additional downward pressure on Brent futures.

By Debarati Bhattacharjee and Aparupa Mazumder

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