The decline seen at the start of this week in global oil prices will likely guide bunker markets in the Americas after days of uncertainty and mixed behavior in most regions, where local fundamentals prevailed over international influences.
OPEC+ reached an agreement on July 18 to increase its production quotas by 400,000 b/d each month starting in August. The impending higher crude output and concerns about the impact on demand from the Delta variant of the coronavirus have since pressured markets, with ICE Brent falling July 19 to touch $69.59/b, after ending last week 2.2% down, at $73.55/b.
Spot prices in large-volume ports in Latin America saw declines while other key ports registered increases in the marine fuel 0.5%S segment.
Ex-wharf 0.5%S in Balboa fell $6, or 1.1%, in the week from July 12 to July 16 to $571/mt, with market participants talking about days of high demand up until the middle of the week, and with a reduced number of inquiries by the end.
In Brazil, the fuel retreated $4, or 0.7%, to $546/mt in the port of Santos.
In Callao it fell $4, or 0.6%, to $651/mt. Talk of reduced refiner supply seemed to ease at the end of the week, and the intense swells that affected several Peruvian ports last week spared the port of Callao, as it is located in front of a protective island, a market participant said.
In Argentina, demand for 0.5%S was also heard strong at the beginning of the week but softened as the days progressed. The 0.5%S rose $6, or 1.1%, to $571/mt in Buenos Aires.
While the 0.5%S finished the week unmoved, at $712/mt, in Valparaiso, Chile, it rose $4 in Cartagena to $576/mt, with talk of a lull market in that Colombian port.
The marine gasoil segment saw a sharp increase in Santos, where MGO was assessed up $17, or 2.4%, at $716/mt. State-led oil Petrobras raised its wholesale prices for diesel on July 6, continuing its policy to keep up with global oil values. In Guayaquil, a sharp increase in state-led Petroecuador pricing led to a $40, or 5.2%, jump in MGO, to $812/mt.
The steepest movement seen last week in bunker prices in Latin America was in the high sulfur fuel in Balboa. On July 14, high sulfur IFO 380 rose up to $457/mt on a day with high liquidity but by July 19 it had fallen to $409/mt. Several factors were mentioned by market sources, including inventories sales, the entrance of a new player in the market, and lack of demand.
NORTH AMERICA, US GULF COAST
Gulf Coast 0.5%S marine fuel prices dropped over the week July 12-16 as fierce competition drove indications lower and highlighted the split in pricing between small and large volume stems.
Houston 0.5%S fell $12/mt over the week to $509/mt ex-wharf on July 16. One source called the marketplace “a bloodbath,” due to the volatility and competitive offering. Others spoke of their difficulty in fixing stems as certain suppliers pulled prices downward.
Indications were heard as low as $508/mt ex-wharf on July 15. Continued variability in crude markets is expected to exacerbate these conditions in the bunker markets.
Spot bunker prices for marine fuel 0.5%S in North America showed declines last week, moved by the volatile energy complex. Activity was heard late last week in Philadelphia, with New York quiet and moving notionally with Philadelphia. New York fell July 16 to $533/mt, down from $541/mt on July 12, while Philadelphia retreated to $535/mt from $546/mt.
Late last week saw activity in Vancouver and some delivered-by-truck pricing talk in Montreal. Montreal 0.5%S was assessed July 16 at $606/mt ex-wharf, up $1 on the week.