The region’s bunker fuel prices have tracked Brent’s upward movement and bunker deliveries in GOLA might be suspended by the end of the week.

PHOTO: Oil refinery in Texas City, Texas, located just south of Houston on Galveston Bay. Getty Images

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

• VLSFO prices up in Balboa ($6/mt), Houston, Los Angeles and Zona Comun ($2/mt), and down in New York ($2/mt)
• LSMGO prices up in Balboa ($4/mt), Houston and Los Angeles ($2/mt), and down in New York ($3/mt)
• HSFO prices up in Houston and Balboa ($5/mt), and New York ($2/mt), and unchanged in Los Angeles

HSFO prices across the key ports moved upward with Balboa and Houston recording the sharpest increase in the last session.

In Houston, the price increase has had little impact, with HSFO still trading at a $48/mt discount to New York.

Bunker fuel availability across all grades has improved in Houston. In New York, suppliers can offer prompt deliveries with expected lead times of 3-4 days.

HSFO is currently priced the same in both Balboa and Cristobal but is more readily available in Balboa due to a higher number of operating barges, while Cristobal requires lead times of at least seven days for prompt deliveries.

VLSFO and LSMGO are available in both Balboa and Cristobal within a week.

In the Galveston Offshore Lightering Area (GOLA), bunker deliveries are currently underway, although disruptions are expected between 28-29 March. Starting 28 March, operations are expected to be suspended due to high wind gusts, a source says.

Brent

The front-month ICE Brent contract has gained $0.55/bbl from Friday, to trade at $72.29/bbl at 08.00 CDT (13.00 GMT).

Upward pressure:

Brent crude’s price has remained steady over the weekend.

Last week, the US Department of Treasury sanctioned a Chinese oil refinery and its chief executive officer for allegedly buying sanctioned Iranian oil, and several other vessels linked to Tehran’s shadow fleet of ships. This news has supported Brent’s price, according to market analysts.

“The move is having an impact on the physical market, with spot and near-term futures gaining for oil from the Middle East,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Additionally, OPEC+ members that have repeatedly breached output quotas announced plans for further cutbacks to compensate for overproduction. This move could offset the planned production hikes set to begin in April.

“However, questions remain about whether members will actually stick to the compensation plan and cut output,” two analysts from ING Bank noted.

Downward pressure:

Oil demand growth concerns have put downward pressure on Brent’s price in recent days, following a 1.7 million-bbl rise in commercial US crude oil inventories last week.

A build in inventories typically signals weaker oil demand, which can cap Brent’s price gains.

Moreover, officials from the US and Russia have commenced talks in Saudi Arabia today, Reuters reports. The talks aim to advance towards a broader ceasefire deal in Ukraine, the report adds.

US President Donald Trump is also pushing for a separate Black Sea maritime ceasefire deal as a precursor to a wider agreement. The talks follow Washington’s negotiations with Kyiv yesterday, as it continues to ramp up efforts to end the three-year conflict in eastern Europe.

A ceasefire deal between Russia and Ukraine could see the US lifting its sanctions on Russian oil exports, which in turn could increase global oil supply, according to market analysts.

By Gautamee Hazarika and Aparupa Mazumder

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