Fuel prices have generally followed Brent’s decline, and HSFO availability in Houston has become very tight, with extended lead times.

IMAGE: Cranes loading a container ship at a marine terminal in New York. Getty Images.

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

• VLSFO prices down in Houston ($14/mt), Los Angeles ($11/mt), Balboa ($7/mt), New York ($6/mt) and Zona Comun ($5/mt)
• LSMGO prices down in Los Angeles ($16/mt), Balboa ($14/mt), Houston ($12/mt), Zona Comun ($8/mt) and New York ($3/mt)
• HSFO prices unchanged in Houston, and down in Los Angeles ($9/mt), New York ($4/mt) and Balboa ($3/mt)

Houston's HSFO benchmark has been the only one to withstand Brent's downward trend and has remained unchanged in the past session.

The port, however, continues to hold a discount of $8/mt to New York, which is almost at par with the discount it held a month ago.

In Houston, HSFO availability has been extremely tight, with lead times now extended to 10–12 days, which may have contributed to prices remaining stable for the grade, a local supplier tells ENGINE.

Los Angeles’ LSMGO price, meanwhile, has dipped the most and maintains a small premium of $40/mt to New York and $91/mt over Houston.

Demand at the port is reported to be fairly steady compared to the slump seen in recent weeks. On the availability side, suppliers remain tight across all three fuel grades and are recommending at least a week to make deliveries.

The Atlantic hurricane season is expected to come to a close next month. Currently, there are two active hurricanes, Humberto and Imelda, and marine warnings remain in effect in the Atlantic, Southwest North Atlantic, and Eastern Pacific regions.

Another tropical storm, Octave, is active in the Eastern Pacific region and may strengthen into a hurricane in a day or two, sources said.

Brent

The front-month ICE Brent contract has made a significant $1.65/bbl loss, trading at $65.45/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

The American Petroleum Institute (API) has estimated a 3.7-million-bbl draw in US crude stocks on the week, which could mark its third straight weekly drop. The official US Energy Information Administration's weekly data is due to be released today.

China "continues to stockpile crude oil," the International Energy Agency noted in September. Coupled with recent improvements in industrial output, this could theoretically indicate that China's oil appetite will remain firm in the near-term, lending some support to Brent.

JPMorgan does not see any signs of global oil demand “slowing down structurally” in the near future, Natasha Kaneva, head of global commodities research at the private bank said in a podcast.

Domestic airline activity in China, broader Asia, Europe and the Middle East as well as port activities in the US remains strong, which is “very, very supportive for the demand numbers”, Kaneva added.

Downward pressure:

OPEC+ members could boost production by 500,000 b/d over the next three months, Bloomberg has reported citing a delegate.

Reuters has also reported that the group could hike output by 500,000 b/d in November, citing three sources.

The OPEC Secretariat has quashed such reports, calling it “inaccurate and misleading” and has urged media restraint to avoid “fuelling unnecessary speculation” in the market.

But if confirmed, such an increase will “increase the scale of the surplus through the fourth quarter of this year and next year,” ING’s head of commodity strategy, Warren Patterson noted.

OPEC+'s expected rise in production output in November, Iraq's resumption of Kurdish oil flows and rising non-OPEC+ production have fuelled fears of a global oil glut, keeping the price under pressure.

By Gautamee Hazarika and Konica Bhatt

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