Fuel prices have mostly trended lower, while Hurricane Loreno threatens heavy rain and potential flooding in the US Southwest.

IMAGE: Boats docked at the marina on US Gulf. Getty Images.

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

• VLSFO prices up in New York ($4/mt), and down in Zona Comun ($14/mt), Balboa ($8/mt), Houston ($5/mt) and Los Angeles ($3/mt)
• LSMGO prices up in New York ($11/mt), Los Angeles ($6/mt) and Houston ($4/mt), and down in Zona Comun ($4/mt) and Balboa ($3/mt)
• HSFO prices up in New York ($5/mt), and down in Los Angeles and Houston ($3/mt) and Balboa ($2/mt)

The port of New York has recorded the highest gains across all three fuel grades in the past session.

New York's LSMGO benchmark has posted the largest increase, but it is currently at a $46/mt premium to Houston, down from the $75/mt premium it held a month ago on 4 August.

Fuel demand has picked up in New York, with the port reporting healthy availability across all three grades. Recommended lead times this week stand at around 3–5 days.

Showers and a slight chance of thunderstorms could cause minor delays to bunkering operations at the port, a source said.

Hurricanes Kiko and Lorena are active in the Eastern Pacific, with Lorena threatening heavy rain and potential flooding in the US Southwest.

Balboa’s HSFO and VLSFO prices have both declined, with VLSFO falling by $8/mt and HSFO by $2/mt, narrowing the port's Hi5 spread to $33/mt today.

VLSFO and LSMGO have been available at the port with lead times of 3–4 days. HSFO supply has remained tight at Balboa, requiring at least a week for delivery.

Brent

The front-month ICE Brent contract has lost $1.33/bbl, to trade at $66.71/bbl at 08.00 CDT (13.00 GMT).

Upward pressure:

Brent crude has found some support from geopolitical risks that could cut oil supply from the market.

Washington has imposed sanctions on several shipping companies and vessels earlier this week for allegedly smuggling Iranian oil disguised as Iraqi oil.

By tightening sanctions, the US administration aims to drive the OPEC producer’s oil exports to zero. “Geopolitics laces through the crude market,” remarked SPI Asset Management managing partner Stephen Innes.

Besides, US President Donald Trump is considering phase two and phase three sanctions on Russia, as Moscow fails to reach a ceasefire deal with Kyiv, Bloomberg reports.

The development comes as the US imposes 50% tariffs on Indian imports in retaliation for New Delhi’s continued purchases of Russian oil.

“Washington’s campaign to stifle Russia’s oil lifeline is intensifying, with Trump teasing “phase two” and “phase three” sanctions after penalizing India for lifting Moscow’s barrels,” Innes said.

Downward pressure:

Brent’s price has plunged following reports that the OPEC+ ministers, due to meet on Sunday, may consider further increases in production targets.

The Saudi Arabia-led group is expected to consider another output hike, Reuters reports, citing two sources familiar with the matter.

“OPEC+ is floating the idea of production hikes at this weekend’s meeting,” according to Innes.

The global oil market faces the risk of oversupply as the Vienna-headquartered group has unwound 2.2 million b/d of voluntary production cuts over the past six months, at a quicker pace than initially scheduled.

“[The] move that feels counterintuitive until you remember the cartel’s long game: clawing back market share from non-aligned producers who’ve been pumping flat-out,” Innes added.

By Gautamee Hazarika and Aparupa Mazumder

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