Bunker fuel prices have mostly declined, and demand on the US West Coast is expected to weaken amid fewer Chinese vessel calls.

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 unchanged in Balboa and Los Angeles, and down in Houston ($13/mt) New York ($3/mt) and Zona Comun ($1/mt)
• LSMGO prices up in Balboa ($1/mt), and down in Zona Comun ($14/mt), Houston ($11/mt) and New York ($4/mt)
• HSFO prices unchanged in Los Angeles, and down in Houston ($6/mt), New York and Balboa ($4/mt)

Bunker fuel prices have mostly tracked Brent’s downward direction or remained unchanged in the past session, except Balboa’s LSMGO price benchmark, which has gained by $1/mt.

The Panamanian port’s Hi5 spread is making a small recovery, currently at $13/mt, up from yesterday’s $9/mt.

Houston’s VLSFO price has declined the most among the grade, and it is currently at a discount of $54/mt to New York, up from the $26/mt discount the port held a month ago.

Weather conditions at the New York Harbour have improved since yesterday, with winds currently blowing from the north between 10–15 knots, resulting in waves of 1–2 feet.

In Los Angeles, both HSFO and VLSFO prices have remained unchanged.

The port is reportedly expecting to see a slump in bunker demand, with Chinese-flagged and built vessels impacted by additional port fees that began this Tuesday, a bunker trader has told ENGINE.

The port’s Executive Director, Gene Seroka, has reaffirmed, "Approximately 20% of vessels that call at the Port of Los Angeles are China-made. Some cargo-handling equipment and cranes are also manufactured in China. Tariffs in one area tend to lead to rising prices in other segments. In the end, making goods more expensive."

Brent

The front-month ICE Brent contract has lost $1.09/bbl on the day, trading at $61.06/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

The UK has announced fresh sanctions on Russia’s energy industry this week. This news has added some upward pressure on Brent crude’s price.

London has imposed sanctions on Russia’s two largest oil companies – Lukoil and Rosneft, as well as 44 shadow fleet vessels.

Both companies “together export 3.1 million barrels of oil per day,” UK’s Foreign, Commonwealth & Development Office said in a statement.

Rosneft alone is responsible for 6% of global and nearly half of all Russian oil production, according to the statement.

“Pressure has been building on Russia’s energy sector in a bid to curb petrodollars to the Kremlin and its ability to finance its war with Ukraine,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

The US Energy Information Administration (EIA) reported a decline in US crude stocks yesterday. This has moved Brent’s price lower, according to analysts.

Commercial US crude oil inventories have gained by 3.5 million bbls to 424 million bbls for the week ending 10 October, according to data from the EIA.

A rise in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

“Oil prices were approaching a third consecutive weekly decline… following a bearish US oil inventory report,” two analysts from ING Bank said.

By Gautamee Hazarika and Aparupa Mazumder

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