Most bunker prices in the Americas have dropped, and bunker operations are suspended in GOLA again.

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

• VLSFO prices up in Zona Comun ($18/mt), Houston ($2/mt) and Balboa ($1/mt), and down in New York ($4/mt) and Los Angeles ($2/mt)
• LSMGO prices down in Balboa ($12/mt), New York ($8/mt), Houston ($3/mt) and Los Angeles ($2/mt)
• HSFO prices up in Houston ($8/mt), and down in New York ($7/mt), Balboa ($5/mt) and Los Angeles ($2/mt)

The price gap between Houston and New York's LSMGO has narrowed further in the past day. New York’s LSMGO price has fallen more sharply than Houston’s due to downward pressure from a lower-priced firm offer. This has reduced New York’s LSMGO price premium over Houston from $13/mt to $8/mt.

Bunkering operations in the Galveston Offshore Lightering Area (GOLA) have been suspended today due to wind gusts of up to 28 knots. A brief window of calmer weather is expected later today, which may allow bunkering to resume temporarily before conditions worsen again by Friday evening. Wind speeds are forecast to increase further and touch 43 knots by Saturday.

Currently, there is a bunker backlog of about 3-4 vessels, a source says. This is likely to grow if the weather conditions continue to deteriorate.

Brent

The front-month ICE Brent contract has dropped by $0.39/bbl lower on the day, to trade at $73.30/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price found some support after the American Petroleum Institute (API) reported a sizeable draw in US crude stocks, easing some demand growth fears in the world’s largest oil-consuming nation.

Crude oil inventories in the US declined by about 7.4 million bbls in the week that ended 30 August, the API reported. The drop in crude stocks was “constructive”, two analysts from ING Bank remarked.

Brent futures gained additional support following a news report which stated that OPEC+ is planning to extend the ongoing production cuts, analysts said. “The report brought some relief to [oil] markets,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Four sources told Reuters that the Saudi Arabia-led coalition is discussing delaying the gradual oil output increase scheduled to commence in October, after Brent’s price plunged lower than the $75/bbl mark.

“The oil balance is in surplus through 2025 (assuming OPEC+ increases supply) and so continuing cuts into 2025 might make sense,” ING Bank’s analysts said.

Downward pressure:

Oil prices have been under pressure this week due to demand concerns from the US and China.

Manufacturing Purchasing Managers' Index (PMI) readings in China and the US came in at 49.1% and 47.2% in August, respectively. These figures fell short of market expectations, prompting concerns of a slowdown in factory activity, analysts remarked.

“Concerns over weaker demand returned to drive [oil] prices lower on the close,” Hynes said, “These concerns were triggered earlier this week by further weak economic data [from China and the US],” he added.

A PMI reading below 50 typically indicates weak economic health and a contraction in the manufacturing sector, which includes production, inventory levels, new orders, etc. It also highlights demand growth concerns, ultimately weighing down on prices of commodities like oil.

“Weak demand remains the key concern for the oil market,” ING Bank’s analysts remarked.

By Debarati Bhattacharjee and Aparupa Mazumder

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