Bunker benchmarks in most Americas ports have tracked Brent’s downward movement, and Houston's LSMGO prices have slumped to a five-month low.

PHOTO: An LPG tanker sailing west along the Houston Ship Channel on the way to Galveston Bay. Getty Images

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

• VLSFO prices down in New York and Houston ($18/mt), Balboa ($17/mt), Los Angeles ($13/mt) and Zona Comun ($2/mt)  
• LSMGO prices up in Balboa ($5/mt), and down in Houston ($20/mt) and New York ($3/mt)
• HSFO prices down in Balboa ($12/mt), Houston ($10/mt) and New York ($8/mt)

Houston’s LSMGO price has declined for the second consecutive day. The benchmark has dropped by $20/mt with pressure from a lower-priced stem fixed in the past day. Meanwhile, New York’s LSMGO decline has fallen marginally, to widen its LSMGO price premium over Houston's from $30/mt, to $47/mt.

Demand for LSMGO has been normal in Houston and suppliers are able to offer stems within 5-6 days of lead time. The port’s LSMGO benchmark is trading at its lowest level since December 2023.

Balboa’s LSMGO price has countered the wider market direction and gained in the past day, while Cristobal’s LSMGO price has dropped. The diverging price moves have erased Cristobal's LSMGO premium over Balboa's LSMGO and flipped to a $12/mt discount now.

The high-water threat resulted in the closure of the Houston Ship Channel yesterday, affecting vessel and barge movements. A high-water threat arises when powerful water currents enter the channel, causing high currents at critical turning points in Houston.

Although restrictions on vessel and barge movements were lifted yesterday evening, restrictions on smaller boat movements persist.

The closure led to significant delays for suppliers, particularly in Houston, Texas City, and Galveston, where barge fleets are concentrated. Scheduled deliveries and barge reloading from oil terminals have been disrupted, with suppliers working to clear the backlog.

Delays and issues are expected for deliveries in this region over the next few days, a source says.

Brent

The front-month ICE Brent contract lost $0.46/bbl on the day, to trade at $82.99/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent futures gained support after Israel rejected the draft ceasefire proposal from Hamas on Monday. This news has sparked fresh concerns about a supply crunch in the global oil market as analysts fear further escalation of tensions in key oil producing regions in the Middle East.

“With the Gaza ceasefire talks falling apart, as was expected, the [oil] market is starting to realize that the geopolitical risk factors have not gone away,” Price Futures Group’s senior market analyst Phil Flynn said.

Israel conducted another round of airstrikes on Gaza’s southern Rafah region yesterday, while the ceasefire talks continued in Cairo, Reuters reported.

Brent gained “on news that Israel had rejected a draft proposal accepted by Hamas and begun hitting targets in Rafah city in southern Gaza,” VANDA Insights’ founder and analyst Vandana Hari said.

Downward pressure:

Brent futures felt some downward pressure due to growing concerns about a potential deceleration in the US economy. This sentiment gained support after the US released a downbeat jobs data and a below-50 reading for manufacturing Purchasing Managers' Index (PMI). A PMI reading below 50 indicates contraction.

“Currently, the [oil] market is worried about a US economic slowdown,” SPI Asset Management’s managing partner Stephen Innes said.

Brent’s price gains will be further capped if the US Federal Reserve (Fed) delays interest rates cut for the rest of this year. The US central bank maintained interest rates at 5.25-5.50% at its latest policy meeting.

Higher interest rates often dampen demand by increasing the cost of commodities like oil for non-dollar holders.

By Debarati Bhattacharjee and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online