Most of the Americas market has risen further on Brent, but trading activity shows wide spreads in price offers and examples of lower-priced stems and declining benchmarks.

IMAGE: Bulk carrier in the Houston Ship Channel. Port Houston

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

• VLSFO prices up in Los Angeles ($9/mt) and New York ($8/mt), and down in Houston ($17/mt), Balboa ($15/mt) and Zona Comun ($11/mt)
• LSMGO prices up in Balboa ($45/mt), New York ($10/mt), Los Angeles ($6/mt) and Houston ($1/mt), and down in Zona Comun ($46/mt)
• HSFO prices up in Los Angeles ($23/mt), Balboa ($7/mt), New York ($5/mt) and Houston ($3/mt)

Houston’s VLSFO price has defied Brent and come down from yesterday’s peak. Seven firm offers, ranging from $615-674/mt, have been clocked for a 500-1,500 mt clip with delivery more than a week out.

A VLSFO stem for that volume was fixed at $599/mt in Houston, and another for a 150-500 mt volume, at $582/mt. This shows that despite a jump in crude values in the past two sessions, there is still bargaining to be done.

There has been a sharp drop for Zona Comun’s LSMGO benchmark after a correction from the previous session. The grade is still $413-534/mt more expensive in Zona Comun than in Rio Grande, Paranagua and Santos.

Zona Comun’s VLSFO benchmark has also retreated from a high, albeit less than its LSMGO. Two 150-500 mt VLSFO stems and one 500-1,500 mt VLSFO stem have been fixed in a $674-684/mt range in the past day and contributed to pull the benchmark down.

Balboa’s VLSFO price has dipped against the general market direction. Offers for 150-500 mt stems have come in a wide $40/mt spread, with $660/mt as the highest and a stem fixed at $614/mt, with delivery in 3-7 days. All of these offers and stems have been priced lower than the previous benchmark and have applied downward pressure.

Brent

After a massive rise in the previous session, front-month ICE Brent has climbed by a further $0.66/bbl to $78.66/bbl at 08.00 CDT (13.00 GMT) today.

Upward pressure:

The conflict between the US and Iran has escalated, with the US launching more strikes on Iran to keep the Strait of Hormuz open to shipping. The latest military action prompted Iranian retaliatory attacks on Kuwait and Bahrain.

“Fresh US strikes on Iran pushed oil higher this morning, with the latest escalation undermining confidence in the fragile ceasefire,” two analysts from ING Bank said.

Russia has banned diesel exports through the end of July to stabilise its domestic fuel market after Ukrainian drone attacks on refineries triggered fuel shortages and sharp price increases, according to Reuters.

“Adding to supply concerns in the oil market, and specifically in middle distillates, Russia announced a ban on the export of diesel until the end of July,” ING Bank analysts added.

Downward pressure:

After a rapid increase in Brent yesterday, its upward momentum has slowed. Market participants are assessing how a flare-up in warfare between the US and Iran could impact oil product markets over the short- and longer-term.

Brent came under some downward pressure after the US Energy Information Administration (EIA) released its latest weekly oil inventory data. Commercial US crude oil inventories rose by 3 million bbls to 411.4 million bbls in the week ending 3 July, according to the EIA.

By Erik Hoffmann and Tuhin Roy

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