Balboa’s LSMGO price has defied Brent and the rest of the market by dropping, and stems can be delivered in several US Gulf Coast locations in less than a week.

IMAGE: Oil tanker with a tug boat escort passing under the Corpus Christi Harbor Bridge. Getty Images

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

• VLSFO prices up in New York ($12/mt), Zona Comun ($10/mt), Houston ($7/mt) and Balboa ($4/mt)
• LSMGO prices up in Zona Comun ($19/mt), Houston ($15/mt) and New York ($9/mt), and down in Balboa ($28/mt)
• HSFO prices up in Balboa ($8/mt), Houston ($6/mt) and New York ($5/mt)

Balboa’s LSMGO price has countered the general market direction and dropped considerably. A lower-priced 50-150 mt LSMGO stem has been fixed at $709/mt with delivery more than a week out, pulling the benchmark down. Others have since indicated at higher $743-745/mt levels.

Both LSMGO and VLSFO grades are in good availability in Balboa, with lead times of around four days advised.

Suppliers in several US Gulf Coast locations also have relatively prompt product available. A supplier in Houston can deliver VLSFO and LSMGO in six days, and a supplier in New Orleans in 6-7 days.

The earliest delivery date for LSMGO in Pascagoula is 4-5 days. LSMGO and VLSFO can be delivered in Bolivar Roads in four days, and LSMGO and HSFO in the Galveston Offshore Lightering Area (GOLA) with a longer lead time of 7-8 days.

Brent

The front-month ICE Brent contract has gained again and added $1.23/bbl in the past day, to trade at $68.90/bbl at 08.00 CDT (13.00 GMT).

Upward pressure:

Brent’s price has gained on renewed geopolitical tensions in the Middle East. Iran has suspended cooperation with the International Atomic Energy Agency (IAEA) – a United Nations' nuclear watchdog.

The news has sparked market speculation about a cold war-like standoff, with the US possibly intensifying oil sanctions on Tehran.

Additionally, the US has reached a trade deal with Vietnam and will impose 20% tariffs on some of the country’s exports.

“The risk-on tone triggered by the Vietnam trade deal helped boost sentiment across the energy complex,” said ANZ Bank senior commodity strategist Daniel Hynes.

The set tariff rate is much lower than previously decided, market analysts said.

“Brent crude oil rose… as investors priced in tentative optimism that more deals will be reached ahead of the 9 July deadline,” Hynes said.

Downward pressure:

Brent’s price gains have been capped after the US Energy Information Administration (EIA) reported a surge in US crude stocks.

Commercial US crude oil inventories surged by 3.8 million bbls to reach 419 million bbls in the week to 27 June, according to data from the EIA.

“The increase was the largest in three months,” Hynes said.

An increase in US crude stockpiles generally signals weaker demand and can dampen Brent's price.

“The build was driven by a large decline in US crude oil exports,” two analysts from ING Bank said.

By Erik Hoffmann and Aparupa Mazumder

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