Prices of conventional bunker fuels across the Americas have moved in mixed directions, and demand has improved in Houston.

IMAGE: Aerial view of the Port of Houston, Texas. Getty Images

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

• VLSFO prices down in Balboa ($23/mt), Houston ($18/mt), Los Angeles ($5/mt), New York and Zona Comun ($1/mt)
• LSMGO prices up in New York ($10/mt), Zona Comun ($2/mt) and Houston ($1/mt), unchanged in Balboa, and down in Los Angeles ($8/mt)
• HSFO prices up in Balboa and Houston ($2/mt), and down in Los Angeles ($4/mt) and New York ($2/mt)

VLSFO prices have declined in all major Americas ports in the past session.

The grade’s price has recorded the steepest fall in Balboa, while the price of HSFO has inched up in the port. This has narrowed the port’s Hi5 spread by $25/mt to just $6/mt.

Bunker availability is good amid weaker demand in the Panamanian ports of Balboa and Cristobal. Lead times of 3-5 days are recommended.

Meanwhile, demand has increased in Houston this week. The port’s VLSFO price has also taken a nosedive. Two lower-priced stems have been fixed in Houston in the last day, weighing on the benchmark.

Like Balboa, Houston’s HSFO price has also inched up in the past session, narrowing the port’s Hi5 spread from almost $50/mt to $29/mt.

The National Hurricane Center’s advisories for Hurricane Imelda on the Atlantic, and for tropical storm Octave on the Eastern Pacific continue to remain in effect. However, on the Central Pacific, no tropical cyclone is expected in the next seven days.

Brent

The front-month ICE Brent contract has moved $0.61/bbl lower, trading at $64.84/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

The US dollar has come under pressure after the US government shutdown, sliding to a two-week low in trade yesterday.

When the US dollar weakens against other currencies, it becomes cheaper for foreign buyers to purchase oil. This can encourage more purchases and put upward pressure on Brent.

“…because oil is a global market and we’re seeing better-than-expected demand in China, global inventories that are tight, and continuing geopolitical risks, the supply side is not headed towards a glut, and we have a market that at the very best is in balance or is headed to a supply deficit in the coming months,” Phil Flynn, a senior analyst at Price Futures Group said, suggesting possible tailwinds for Brent in the near-term.

Downward pressure:

An unexpected build in US commercial crude inventories has added further downward pressure on Brent.

Official data from the US Energy Information Administration (EIA) showed stocks rising by 1.8 million bbls to around 417 million bbls, compared with industry body American Petroleum Institute’s forecast of a 3.7-million-bbl draw.

Concerns over a looming oversupply continue to dampen market sentiment.

Multiple media reports cited sources that OPEC+ could lift production by 500,000 b/d – either in November or spread over the next three months.

The OPEC Secretariat has refuted those specific reports, but Iraq has now confirmed its own plans to increase output.

Iraq plans to raise domestic oil production from 4.4 million b/d to 5.5 million b/d by the end of 2025, Iraq’s oil minister, Hayyan Abdul Ghani, told Kurdish broadcaster Rudaw. The announcement follows the resumption of crude flows from Kurdistan oil fields to Turkey, which at full capacity could add around 400,000 b/d back to the market.

By Samantha Shaji and Konica Bhatt

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