Regional bunker prices have mostly gained with Brent, and severe flooding has disrupted bunkering in Rio Grande.
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 ($19/mt), Balboa ($17/mt), New York ($10/mt), Los Angeles ($6/mt) and Zona Comun ($5/mt)
• LSMGO prices up in Houston ($27/mt), Balboa ($18/mt), Los Angeles ($12/mt) and New York ($10/mt)
• HSFO prices up in Houston ($9/mt), New York ($7/mt) and Los Angeles (43/mt), and unchanged in Balboa

Long Beach’s LSMGO price has gained more than Los Angeles’ LSMGO price in the past day. This has narrowed Los Angeles’ LSMGO price premium over Long Beach's LSMGO from $16/mt to just $9/mt.

All grades are tight for very prompt delivery dates in the West Coast ports of Long Beach and Los Angeles. Lead times of more than seven days are generally recommended to avoid pricing premiums in the West Coast ports. However, demand has been extremely low in both ports.

Houston’s LSMGO price has gained heavily with support from a higher-priced firm offer in the past day. Meanwhile, New York’s LSMGO price has made a smaller gain compared to Houston's. This has narrowed New York’s LSMGO price premium over Houston by $17/mt to $38/mt.

In Rio Grande, heavy rainfall and flooding have caused high currents, which have disrupted bunkering in all anchorages there. While deliveries at the berth are not officially suspended, they are being approved on a case-by-case basis by the port authority.

Currently, Brazilian energy firm Raizen is actively redirecting all bunker-only calls from Rio Grande to Salvador.

Brent

The front-month ICE Brent contract gained $1.68/bbl on the day, to trade at $84.04/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent futures surged after the US Energy Information Administration (EIA) reported an unexpected decline in US crude stocks.

Commercial crude oil inventories in the US dropped by 1.36 million bbls to 460 million bbls in the week ended 3 May. The stocks dropped amid higher US crude oil exports and increased refinery utilisation.

Brent’s price gained “after a fall in US inventories signalled a tight physical market,” ANZ Bank’s senior commodity strategist Daniel Hynes said. The drop in inventories was “against expectations,” he added.

In the Middle East, talks about a potential ceasefire agreement between Israel and Hamas came to a halt after Israel rejected Hamas’ latest truce proposal this week.

“The Gaza crisis continued to fester, with Israel poised to launch a ground offensive in Rafah, while its ceasefire negotiations with Hamas remained stuck in a difficult deadlock,” VANDA Insights’ founder and analyst Vandana Hari said.

Besides, Russian Deputy Prime Minister Alexander Novak has reiterated that there are no plans to increase oil output anytime soon.

Downward pressure:

A stronger US dollar has been “denting investors’ appetite” and putting downward pressure on dollar-denominated commodities like oil, Hynes said.

Additionally, ‘hawkish’ comments from the US Federal Reserve’s (Fed) officials are “raising doubts about a rate cut,” Hynes added.

The US central bank maintained interest rates at 5.25-5.50% at its latest policy meeting. It is expected to hold interest rates steady until it gains greater confidence about bringing the inflation level down in the country.

“We are fully committed to returning inflation to our 2 percent goal,” Fed chairman Jerome Powell said earlier.

By Debarati Bhattacharjee and Aparupa Mazumder

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