Americas bunker prices have mostly dropped, and New York's Hi5 spread has narrowed further.

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

• VLSFO prices down in New York ($8/mt), Balboa, Zona Comun, Los Angeles and Houston ($1/mt)
• LSMGO prices down in New York ($29/mt), Houston, Los Angeles and Balboa ($1/mt)
• HSFO prices unchanged in Houston, and down in New York, Los Angeles and Balboa ($1/mt)

Most LSMGO benchmarks in key Americas ports have held steady in the past day. But, New York’s LSMGO price has dropped heavily with downward pressure from a 150-500 mt stem with prompt delivery. This has flipped its $22/mt LSMGO price premium over Houston, to a $6/mt discount now.

New York’s VLSFO price has dropped by $8/mt in the past day, while its HSFO price has held steady. This has narrowed the port’s Hi5 spread further from $29/mt yesterday, to $22/mt now. It is at its narrowest since January.

Bunker fuel availability has not been affected by the ongoing dockworkers' strike action in the East Coast port of New York. Most suppliers are still able to offer VLSFO and LSMGO stems within five days of lead time.

“A backlog of container ships during the work stoppage may overwhelm local pilots even if a new contract is signed, causing further delays in port operations,” a source said.

Brent

The front-month ICE Brent contract has inched $0.06/bbl lower on the day, to trade at $75.48/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

Brent’s price has found some upward pressure following a significant escalation in the conflict in the Middle East.

Iran launched over 180 missiles across Israel on Tuesday, the Israel Defense Forces (IDF) claimed. The Iranian attack came just days after Israeli military actions in Beirut, which resulted in the deaths of senior Hezbollah leader Hassan Nasrallah and other prominent leaders of the Iran-aligned militant group.

Israeli Prime Minister Benjamin Netanyahu has vowed to retaliate to Tehran’s airstrike. “Iran made a big mistake tonight [Tuesday] - and it will pay for it,” he said in an official statement on social media platform X (formerly Twitter).

As the OPEC member nation's direct involvement in the Middle Eastern tension opens the door to a wider regional conflict, oil market analysts and traders await Tel Aviv’s response.

“Broader markets, including oil, continue to wait and see how Israel responds to Iran’s recent missile attack,” two analysts from ING Bank said. “There are suggestions that Iranian oil infrastructure could potentially be targeted,” they added.

Downward pressure:

Brent’s price felt downward pressure after the US Energy Information Administration (EIA) reported an unexpected rise in crude stockpiles, contrary to market expectations of a drawdown.

Commercial crude oil inventories in the US increased by 3.89 million bbls to touch 417 million bbls on 27 September, the EIA reported. “[The] swelling US inventories added evidence that the market is well supplied and can withstand any disruptions,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Besides, Brent’s price moved lower after manufacturing PMI in the US, the world's largest oil consumer, came in below expectations in September.

The US Manufacturing Purchasing Managers' Index (PMI) reading stood at 47.2% in September, unchanged from the previous month, the Institute for Supply Management (ISM) reported.

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.

By Debarati Bhattacharjee and Aparupa Mazumder

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