Bunker fuel benchmarks have moved in mixed directions, and high wind gusts could delay bunkering in the Bahamas' Freeport.

IMAGE: Cargo containers being offloaded in the port of Los Angeles. Getty Images

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

• VLSFO prices down in Zona Comun, Los Angeles, Houston ($3/mt) and Balboa ($1/mt), and unchanged in New York
• LSMGO prices up in Balboa ($45/mt) and Houston ($1/mt), and down in New York and Los Angeles ($2/mt)
• HSFO prices up in Balboa ($9/mt), Houston and New York ($2/mt), and unchanged in Los Angeles

VLSFO prices have declined in most ports, while HSFO prices have moved up in Balboa, Houston and New York.

Balboa's LSMGO price has recorded the highest increase of $45/mt. It is currently at discounts of $16/mt to Colombia's Barranquilla and $11/mt to Buenaventura, and at premiums of $16/mt over Cartagena and $23/mt over Santa Marta.

Container liners are expected to reduce their bunker surcharges after a period of low VLSFO prices.

"The only downward trend we're seeing right now is in bunker surcharges. With global bunker fuel prices steadily falling, Q3 surcharges are being revised lower. VLSFO has been holding around $570 per ton for two months straight - a level we haven't seen since September 2021," says Lars Jensen, chief executive of Vespucci Maritime.

The period from June to September is considered peak season for global container shipping, which could result more congestion in major ports.

The Bahamas' Freeport is facing bunker disruptions and delays due to high wind gusts. Rough weather conditions are expected to persist until 5 June.

Brent

The front-month ICE Brent contract has lost $0.23/bbl on the day, trading at $65.19/bbl at 08:00 CDT (13:00 GMT).

Upward pressure:

Brent futures have found support amid escalating geopolitical tensions, as the conflict between Russia and Ukraine has intensified and Iran is reportedly prepared to reject a nuclear deal proposal from the US.

Over the weekend, Ukraine and Russia engaged in one of the largest drone battles of their war. Additionally, Ukraine blew up a Russian highway bridge as a passenger train crossed and launched an attack on nuclear-capable bombers deep inside Siberia, according to Reuters.

"Oil prices were supported by rising geopolitical tensions. Ukraine struck air bases deep in Russia, putting a dent in efforts to reach a peace deal," commented Daniel Hynes, senior commodity strategist at ANZ Bank.

Meanwhile, a senior Iranian diplomat told Reuters on Monday that Iran was set to reject a US proposal to resolve the decades-old nuclear dispute, as the plan does not meet Iran's interests. If the nuclear talks with Iran collapse, ongoing sanctions could continue to restrict Iranian oil supply, thereby supporting global oil prices.

Further support has come from a weak dollar. The dollar index hovered near six-week lows earlier today as investors assessed the potential impact of President Donald Trump's tariff policies, which could slow economic growth and fuel inflation. A weaker dollar typically supports Brent's price, as it makes dollar-priced commodities like oil more affordable for holders of other currencies.

Additionally, eight OPEC+ members agreed to raise their combined oil output by 411,000 b/d in July, compared to June’s levels. This increase was smaller than many in the market had expected, easing concerns about a significant supply surge.

Dollar weakness, growing geopolitical tensions and "a supply hike from OPEC+ that fell short of expectations all provided a boost," two analysts from ING Bank noted.

Downward pressure:

Kazakhstan has informed OPEC that it does not intend to cut its oil production, according to a Thursday report by Russia's Interfax news agency, citing the country’s deputy energy minister, Reuters reported.

This announcement has added some downward pressure on Brent.

By Gautamee Hazarika and Tuhin Roy

Please get in touch with comments or additional info to news@engine.online