Most bunker prices in the Americas have dropped, with the notable exception of Port Bolivar's LSMGO price.

PHOTO: A view of the Houston Ship Channel with barges, loading docks and industrial plants in the background. Getty Images

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

• VLSFO prices down in Los Angeles ($22/mt), Houston ($11/mt), New York ($9/mt), Balboa ($7/mt) and Zona Comun ($3/mt)
• LSMGO prices down in Zona Comun ($16/mt), New York ($14/mt), Houston, Los Angeles ($12/mt) and Balboa ($7/mt)
• HSFO prices down in Los Angeles ($18/mt), Balboa ($13/mt), New York ($10/mt) and Houston ($6/mt)

Most benchmarks in the Americas have dropped in the past day. But Port Bolivar’s LSMGO price has defied the general market direction and gained by $50/mt in the past day. Two higher-priced 150-500 mt LSMGO stems fixed at $748/mt and $764/mt have dragged the benchmark lower. 

Meanwhile, Houston’s LSMGO price has dropped with pressure from several lower-priced firm offers. This has narrowed Houston’s LSMGO price premium over Port Bolivar's from $68/mt yesterday to just $6/mt now.

Houston’s VLSFO price has dropped more than the port’s HSFO price. This has narrowed the port’s Hi5 spread to below $100/mt.

The port of St. Eustatius in the Caribbean is currently experiencing strong wind gusts of 28–32 knots, making bunker deliveries difficult there. The weather is expected to remain rough until Saturday morning.

Brent

The front-month ICE Brent contract has moved $1.16/bbl lower on the day, to trade at $80.50/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price found support after the US Energy Information Administration (EIA) reported a drop in crude stocks. Commercial crude oil inventories in the US dropped by 3.74 million bbls to 436 million bbls in the week ending 19 July, the EIA reported.

The drawdown in stockpiles reported by the EIA “was the fourth straight decline and brings total stockpiles down to the lowest level since February,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

The OPEC Secretariat has received compensation plans from Russia, Iraq, and Kazakhstan for producing crude oil above their allocated production quotas in the first six months of 2024. This news has provided some support for prices.

The combined overproduction from the three countries totalled 2.28 million b/d between January and June 2024. During this period, Iraq exceeded its crude production quota by 1.18 million b/d, Kazakhstan by 620,000 b/d, and Russia by 480,000 b/d, according to OPEC.

The countries will make up for the excess supply in full over the next 15 months, ending in September 2025, the Vienna-headquartered group said.

Brent also found upward support from “a drop in US crude inventories and Russia's pledge for additional production cuts,” analysts from Saxo Bank noted.

Downward pressure:

Hopes for an imminent ceasefire agreement between Israel and Hamas have tempered Brent crude oil price gains this week. Israel’s Prime Minister Benjamin Netanyahu delivered an hour-long speech to the US Congress yesterday in which he outlined plans to gradually cease military operations in the Gaza Strip.

To further discuss the current situation in Gaza, Netanyahu will meet with US President Joe Biden today. He is also scheduled to meet with former US President Donald Trump in Florida tomorrow.

Brent’s price is expected to drop further if the US, Qatar and Egypt successfully crack a ceasefire deal, putting oil supply disruption concerns from the region out of the picture.

Signs of an economic slowdown in China have raised concerns about demand growth in the country. According to recent figures, China's GDP growth dropped from 5.3% in the first quarter to 4.7% in the second quarter.

By Debarati Bhattacharjee and Aparupa Mazumder

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