In this week’s Market Movers Americas, presented by Brooke Hansen:
• Oil markets on edge as Venezuela, Middle East tensions mount
• Saint John turnaround end means more distillates to the USAC
• Houston VLGC rates increase on Panama Canal drought
• South American container rate coastal spread widens
This week,
US oil prices are on edge amid the threat of escalating conflict in the Middle East. Futures prices have stayed in a narrow range since Iran called on Islamic states to stop exporting oil to Israel. The move could weigh on oil prices, as Tehran tried for a second time to appeal to its fellow OPEC members to retaliate over escalating hostilities. In addition, the lifting of sanctions on Venezuelan oil is at risk again after Venezuela’s Supreme Court ordered the suspension of the opposition party's primary election results.
Also in oil markets, the restart of Irving Oil’s refinery in New Brunswick, Canada, after a multi-week partial turnaround will likely help alleviate tight distillate supplies on the US Atlantic Coast. The refinery is a key refined products supplier for the region and was scheduled to restart over the weekend.
LPG shipping rates in the Houston Very Large Gas Carrier market are expected to rise in the coming weeks as market players make future vessel reservations amid worsening drought conditions at the Panama Canal. The Panama Canal Authority announced that the number of reservation quotas will be pulled back in a stepped approach that began on Friday.
The Latin American container market will see more rate instability for North Asian imports this month as the cost differential between East- and West Coast-bound shipments widens. Capacity has been significantly restricted on ex-Asian imports to East Coast South America due to increased blanked sailings and flooding in Brazil. Meanwhile, shippers moving cargo into West Coast Latin America are citing increased vessel capacity with expanded services and larger ships.
I’m Brooke Hansen. Thanks for kicking off your Monday with S&P Global Commodity Insights.