Bunker fuel benchmarks have largely moved in the downward direction, and weather conditions have improved in Zona Comun.

IMAGE: Oil refinery with a view to downtown Houston. Getty Images

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

• VLSFO prices down in Houston ($22/mt), Zona Comun ($20/mt), Los Angeles ($13/mt), Balboa ($11/mt) and New York ($9/mt)
• LSMGO prices down in Zona Comun ($20/mt), Balboa and Houston ($19/mt), New York ($16/mt) and Los Angeles ($14/mt)
• HSFO prices unchanged in Houston, down in Balboa ($13/mt), New York ($12/mt) and Los Angeles ($8/mt)

Zona Comun's LSMGO price benchmark has come under downward pressure after a lower-priced 150-500 mt LSMGO stem was booked at $1,074/mt.

The anchorage's VLSFO price has also declined after another lower-priced 150-500 mt VLSFO stem was booked at $539/mt, putting downward pressure on the benchmark.

Deliveries are currently underway, and weather conditions have improved, a source said. The anchorage has recently been affected by frequent, intermittent suspensions due to rough weather conditions. Lead times have also increased from 5-6 days to 7-8 days this week.

Houston's HSFO price benchmark has defied the general market direction and has remained unchanged in the past session. It is currently trading at a small discount of $19/mt to New York, down from $47/mt in early March.

Demand has improved over the week in Houston, and availability is good across all three fuel grades at the port. The shortest time for HSFO and LSMGO in Houston is 2-3 days.

Brent

The front-month ICE Brent contract has lost $1.22/bbl on the day from Friday, to trade at $68.98/bbl at 08.00 CDT (13.00 GMT).

Upward pressure:

Oil has retained some ground after official drilling figures showed a decline in US oil rigs. The total number of oil rigs fell by two over the week to 422, according to Baker Hughes.

“Despite oil prices having been more stable in recent weeks, the US oil rig count continues to fall,” two analysts from ING Bank noted.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

In a tight market, any signal of reduced future supply can put upward pressure on Brent’s price.

“This is the 12th consecutive week of declines, taking the cumulative decline to 53 over this period,” said ING analysts.

Downward pressure:

Brent’s price has moved lower as market participants showed little reaction to the EU’s latest sanction package against Russia.

Last week, the European Union (EU) adopted the 18th package of economic sanctions against Russia, aimed at limiting oil revenues flowing to its war chest.

The EU has targeted 105 vessels that are allegedly a part of the Russia's shadow fleet used to circumvent the price caps set on Russian crude and oil products. It has also lowered the oil price cap for Russian crude from $60/bbl to $47.60/bbl.

“Oil barely blinked at the EU’s latest attempt to tighten the screws on Russian energy,” said SPI Asset Management managing partner Stephen Innes.

The sanctions will come into force on 3 September.

By Gautamee Hazarika and Aparupa Mazumder

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