Most regional bunker benchmarks have dropped again, and bunker operations are suspended in Zona Comun and GOLA.

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

• VLSFO prices up in New York ($1/mt), and down in Houston ($28/mt), Balboa ($9/mt), Los Angeles ($5/mt) and Zona Comun ($3/mt)
• LSMGO prices up in New York ($9/mt) and Balboa ($5/mt), and down in Houston ($29/mt), Los Angeles ($7/mt) and Zona Comun ($5/mt)
• HSFO prices down in Los Angeles and Balboa ($5/mt), Houston ($2/mt) and New York ($1/mt)

Houston’s LSMGO price has dropped heavily in the past day with pressure from a lower-priced stem. Meanwhile, New York’s LSMGO price has gained, widening its LSMGO price over Houston from $8/mt, to $46/mt.

Bunkering operations in the Galveston Offshore Lightering Area (GOLA) have remained suspended today due to wind gusts of up to 43 knots. Wind speeds are forecast to increase further and touch 43 knots tomorrow.

Suppliers in GOLA have faced intermittent bunkering suspension since Tuesday due to unstable weather conditions.

Currently, there is a bunker backlog of about 5-6 vessels, up from yesterday’s backlog of 3-4 vessels, a source says. This is likely to grow if the weather conditions continue to deteriorate. Weather is expected to remain rough until Tuesday.

Bunker operations have remained suspended in Argentina's Zona Comun anchorage since yesterday evening due to strong wind gusts of up to 26 knots. Bunkering delays are expected at the anchorage, a source says.

Brent

The front-month ICE Brent contract has moved $0.48/bbl lower on the day, to trade at $72.82/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price found some support after eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) collectively decided to postpone the gradual easing of production cuts that was scheduled to begin in October.

OPEC+ members, including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman, and the UAE, have decided to extend the ongoing output cut of 2.2 million b/d for two more months. The group now plans to gradually unwind the production cuts beginning 1 December and continuing until November 2025.

“This [OPEC’s announcement] was not surprising, considering the pressure oil prices have been under in recent months,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

On the demand side, Brent found some support after the US Energy Information Administration (EIA) reported a sizeable decline in crude inventories. Commercial crude oil inventories in the US dropped by 6.87 million bbls to touch 418 million bbls on 30 August, according to the EIA.

A drop in crude stocks is considered a positive indication of oil demand growth in the world’s largest oil-consuming nation, according to market analysts. Yesterday’s EIA inventory report “was fairly constructive,” two analysts from ING Bank noted.

Downward pressure:

The global oil market’s sentiment is still negative as demand growth concerns from top oil consumers, China and the US, have outweighed any signs of supply tightness.

“Oil prices are giving into weak demand concerns out of China,” Price Futures Group’s senior market analyst Phil Flynn remarked.

Manufacturing Purchasing Managers' Index (PMI) readings in China and the US came in at 49.1% and 47.2% in August, respectively. A PMI reading below 50 indicates weak economic health and a contraction in the manufacturing sector. It also highlights demand growth concerns, ultimately weighing down on prices of commodities like oil.

Brent’s price has “taken a beating after breaking below key technical levels, with China demand concerns, weak global refinery margins,” analysts from Saxo Bank noted.

By Debarati Bhattacharjee and Aparupa Mazumder

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