Fuel prices have mostly tracked Brent's upward movement, and bunker deliveries have slowed in Argentina's Zona Comun.

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Changes on the day to 07.00 CST (13.00 GMT) today:

• VLSFO prices up in Zona Comun ($13/mt), Los Angeles ($8/mt), Houston, New York ($7/mt) and Balboa ($5/mt)
• LSMGO prices up in Zona Comun ($21/mt), Balboa ($13/mt), Houston ($5/mt) and Los Angeles ($2/mt), and down in New York ($5/mt)
• HSFO prices up in Balboa ($12/mt), Houston ($9/mt), New York ($4/mt) and Los Angeles ($3/mt)

New York’s LSMGO price benchmark has been the outlier in the past day, defying Brent’s upward movement and the broader market direction.

The grade has gained $5/mt at Houston, yet the port remains at a $125/mt discount to New York, which is a sharp jump from the $40/mt discount it held a month ago.

Demand at the port of Houston had weakened in October, which led to a drop in prices. Since then, bunker demand has picked up, but it is still considered historically low, a bunker trader told ENGINE.

The port of New York is experiencing rough weather, with a gale warning in effect from Friday morning through the afternoon. Wind gusts of 30–35 knots have been forecast, generating waves of over 3 feet.

A small craft advisory is in place through late tonight.

Zona Comun’s anchorage has recorded the biggest gains for both VLSFO and LSMGO in the past day. Both grades have maintained steady availability and can be delivered within 5–7 days.

According to a local market source, bunker deliveries at Zona Comun have slowed in recent days. A recent fire at a refinery in La Plata temporarily curtailed heavy fuel production, though output has now begun returning.

Brent

The front-month ICE Brent contract has gained $0.91/bbl on the day, to trade at $63.20/bbl at 07.00 CST (13.00 GMT) today.

Upward pressure:

Brent crude’s price has rebounded, reversing earlier losses, as traders priced in the likelihood of a final US Federal Reserve (Fed) rate cut in December.

The expectations come following recent remarks from US policymakers, analysts said. Earlier this week, Fed Governor Christopher Waller said that the US labour market has softened to justify a final 25 bp cut at the central bank’s upcoming meeting next month.

Oil prices moved higher as “expectations grow for a December interest rate cut by the US Federal Reserve,” two analysts from ING Bank noted.

Lower interest rates in the US can boost demand, making dollar-denominated commodities like oil cheaper for holders of other currencies.

Downward pressure:

The US Energy Information Administration (EIA) reported a surge in crude stocks – capping some of Brent’s price gains today.

Commercial US crude oil inventories have increased by 2.8 million bbls to 427 million bbls for the week ending 21 November, according to data from the EIA.

“The market also noted a rise in US oil inventories,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

A build in US crude stocks typically indicates lower demand for oil and can put downward pressure on Brent futures.

The EIA’s weekly inventory report was “relatively bearish,” ING Bank’s analysts added.

By Gautamee Hazarika and Aparupa Mazumder

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