AMERICAS BUNKERS: Key market indicators Aug. 2-6
Spot bunker pricing in the Americas registered a second consecutive week of increases with the aid of stable to heightened demand and bullish global oil prices.
ICE Brent crude futures moved up 2.3% from July 26 to July 30 to $76.32/b although they were retreating early on Aug. 2 to around $74.20/b. The upward drivers have been forecasts of tightened oil world supplies during the rest of the year combined with expectations of increased success by vaccination campaigns, but concerns prevail about the coronavirus delta variant.
Retail bunker prices in Latin America have continued to increase in most key ports, supported not only by global energy prices but also by stable or improved outlooks for local demand, coupled with supply tightness in some ports.
Ex-wharf marine fuel 0.5% in Balboa rose $13, or 2.4%, last week, to be assessed at $550/mt on July 30. Sources described demand as “average,” with a couple of days showing especially strong activity. Talk of supply tightness by the end of the week might bring support to the market in the next few days.
“Panama is super tight and most [suppliers] offer earliest delivery more than two weeks out,” a bunker source said.
In the 0.5%S segment, the sharpest increase in the region was seen in Santos, where the fuel’s price rose $18, or 3.4%, to $553/mt.
Production of fuel oil and bunker fuel in Brazil increased 21.5% month on month in June to 9.207 million barrels supported by higher demand from the electricity sector, according to government data.
Brazil has taken advantage of its low-sulfur crudes to increase production and exports of bunker fuels, mainly to Asia. But increased domestic demand of fuel oil and maintenance works at refineries has led to an export decline this year. Sales abroad of fuel oil and bunkers fell in June to 5.67 million barrels, down around 80% from 10.10 million barrels in May, and 15% lower than the 7.13 million barrels exported in June 2020.
So far this year, Brazil’s exports have fallen 15% from 2020 levels and sales abroad might not strengthen in the next few months as refinery output is expected to trend lower in the second half of 2021 due to refinery maintenance works and plant-expansion projects.
In Buenos Aires, the 0.5%S jumped $9, or 1.6%, to $589/mt last week. “Good demand the entire month of July, and August is looking positive too,” a market participant in the Argentinian market said.
There was a price decline in Valparaiso, where 0.5%S dropped $5, or 0.7%, to $717/mt last week. However, it reached $724/mt on July 29, its highest price since $727/mt on January 29, 2020.
In the marine gasoil segment, stable markets saw unchanged pricing in Callao, Peru, and in Guayaquil, Ecuador. Unmoved for the week, MGO was assessed at $765/mt and $827/mt, respectively.
However, in Santos, marine gasoil jumped strongly, $13, or 1.8%, to $720/mt. Independent truckers, who have called for an end to Petrobras’ policy of keeping domestic gasoil and gasoline prices at parity with international imports, ended a four-day, low-turnout strike, but they said will review their future options.
In the high sulfur segment, tight availabilities were heard in Panama, especially in the Atlantic port of Cristobal, as well as in Ecuador.
“Cristobal is super dry,” a source said, adding only one supplier was moving high sulfur bunkers and with a “full schedule.” Regarding Ecuador’s high sulfur fuel, a source said, “almost no supply.”
IFO 380 in Panama moved up $10 or 2.4% last week to $419/mt. In Guayaquil, it rose $6, or 1.4%, to $430. The high sulfur bunker fuel is allowed to be used internationally only by ships equipped with exhaust cleaning systems known as scrubbers.
On the US Gulf Coast, supply of high sulfur IFO 380 was also talked as being tight in Houston, leading to a $12, or 2.9%, increase in the fuel to $422/mt in the July 26-30 period.
Also in Houston, retail marine fuel 0.5%S gained $7 to $531/mt, amid a persistent competitive market and limited demand.
The retail value left it in an inverse relationship to the wholesale market on the US Gulf Coast, where the fuel sold in bulk moved up 2.1% to $535.25/mt last week. In New Orleans, however, pricing for retail 0.5%S was higher than wholesale, rising $12 to $541/mt.
Marine gasoil in Houston and New Orleans saw a weekly advance of $7 to $610/mt and $515/mt, respectively.
Spot bunker prices in other ports of North America finished last week higher as the energy complex gained most of the week.
US Atlantic ports saw more activity with Charleston, Savannah and Montreal markets moving most of last week on indications.
Montreal 0.5%S marine fuel was priced at $603/mt, up $6, while MGO was assessed $5 higher at $690/mt to end last week. MGO in Charleston and Savannah were assessed up $10 on indications, at $659/mt and $655/mt, respectively. Philadelphia bunkers were called between flat to $2/mt above New York.
Vancouver marine gasoil was valued at $748/mt, up $9 from July 29. “MGO is up more, based on racks,” said one market source. Little bunkers activity was heard in the rest of the West Coast ports.