Most fuel prices have moved in mixed directions, and thunderstorms are expected to disrupt bunker operations in Balboa through Sunday.

IMAGE: Container vessels docked in the Port of Balboa. Getty Images

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

• VLSFO prices up in Zona Comun ($3/mt), unchanged in Houston, and down in New York ($3/mt), Balboa ($2/mt) and Los Angeles ($1/mt)
• LSMGO prices up in Zona Comun ($6/mt), Houston ($2mt), Balboa ($1/mt), and down in Los Angeles ($15/mt) and New York ($1/mt)
• HSFO prices up in Houston ($1/mt), down in Los Angeles ($7/mt), New York and Balboa ($2/mt)

Houston's VLSFO price has remained unchanged in the past session. The port priced its VLSFO at a discount of $51/mt to New York ten months ago, but diverging price movements have narrowed the price gap, bringing it to a discount of $14/mt now.

Recommended lead times for VLSFO and HSFO at Houston stand at 5-7 days. LSMGO is more readily available and can be delivered within five days, a source said.

New York and Los Angeles have recorded price declines across all three fuel grades.

Los Angeles's LSMGO recorded the sharpest dip, falling by $15/mt. It nonetheless continues to trade at premiums of $67/mt to Houston and $32/mt to New York.

The earliest delivery date for LSMGO is four days with one supplier in Los Angeles and Long Beach.

Balbao is expected to face possible disruptions and delays between 9-13 July in bunkering operations due to strong thunderstorms in the region, a source said.

Brent

The front-month ICE Brent contract gained $0.54/bbl on the day, to trade at $70.13/bbl at 08.00 CDT (13.00 GMT).

Upward pressure:

Renewed Houthi attacks on commercial ships in the Red Sea have contributed to a rise in Brent crude futures.

Yemen-based Houthi militants launched a drone and speedboat assault on the Liberian-flagged bulk carrier Eternity C off the coast of Yemen—the second such incident in a single day, ending a period of relative calm. The attack resulted in the deaths of three crew members and injuries to two others. Just a day earlier, the Houthis attacked the Greek-operated vessel Magic Seas.

These incidents have revived concerns over the safety of shipping through the Red Sea, a key route for global trade, thereby pushing up oil prices. Last year, similar attacks forced oil, LNG and other energy carriers to reroute around the region, increasing transportation distances and driving up energy costs.

“Crude oil prices gained amid renewed tensions in the Middle East,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“Increased tensions in the Middle East, in the form of Houthi attacks on vessels in the Red Sea, will provide some support [to oil prices],” two analysts from ING Bank shared this view. 

Oil prices are also being buoyed by a tightening middle distillates market.

“Distillate inventories are currently at their lowest point since 1996,” noted Phil Flynn, senior market analyst at Price Futures Group.

Downward pressure:

US President Donald Trump has extended the deadline to impose higher tariffs on multiple countries to 1 August—a date he called final—stating, “No extensions will be granted.” He also announced plans to impose a 50% tariff on imported copper and to soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening a trade war that has unsettled global markets, according to Reuters.

Market watchers are increasingly concerned that these tariffs could dampen sentiment across sectors and put downward pressure on oil prices.

Adding to the bearish sentiment, US crude oil inventories rose by 7.1 million bbls in the week ending 4 July, according to estimates from the American Petroleum Institute (API) cited by Trading Economics. A rise in US crude stockpiles typically signals weaker demand and can weigh on Brent futures.

“Numbers from the API overnight were bearish for oil,” commented analysts from ING Bank.

By Gautamee Hazarika and Tuhin Roy

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