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ENGINE: Americas Bunker Fuel Availability Outlook

Bunker fuel oil remains tight across major ports in the US and the Caribbean.

HSFO380 supply continues to be scant in New York Harbor, partly as volumes have been termed up in contract to limit availability for the spot market, sources say. Several suppliers have been unable to quote for prompt dates or to give any firm dates on when they expect resupply.

US fuel oil stockpiles were drawn down to all-time lows in late December, curbing volumes for distribution to many of the country’s ports, as well as regional bunker markets like Panama which depend on US-produced fuel oil for part of their supply.

So far in January, there has been 40-45% less fuel oil supplied out of US storage tanks than in November-December. Some of these volumes can go to power plants or refinery coking units for upgrades to lighter oil products, but about 80-90% of it has historically gone to bulk terminals and blenders and been supplied as bunker fuel.

Resupply to bunker ports has also been capped by less access to import cargoes. VLSFO supply has been tight in Singapore and other Asian ports, and Singapore has pulled European cargoes amid favourable arbitrage economics. This has reduced availability of European fuel oil cargoes for export to the US.

While Baltic Sea Russian ports have remained the main source for US fuel oil importers in recent weeks, total US imports have slowed by 10% in January compared to November-December.

With fuel oil supply tight across major US ports, resupply under pressure, and steady bunker demand, many bunker suppliers have held their ground in wait for attractive prices before moving product, sources say.

US fuel oil inventories have struggled to regain weight since slumping to record lows, and were virtually unchanged in the week to 14 January – the most recent week recorded by the Energy Information Administration (EIA). But as combined domestic refinery production and imports picked up by 15% in the week, more of these barrels could find their way to bunker markets.

US West Coast fuel oil production surged to its highest level since late 2019 and could help ease the tightness in Los Angeles, Long Beach and San Francisco.

VLSFO is tight with certain suppliers in Panama for dates stretching into early February. Balboa has been pricing the grade at significant premiums over Houston since early December, and especially in the past week.

Prompt VLSFO deliveries are available in Zona Comun. Certain suppliers require about five days of lead time for VLSFO stems, and prompt deliveries are possible with several other suppliers.

The Argentinian anchorage location has been pricing VLSFO at sustained discounts to Brazilian ports where supply has been tight, like Paranagua and Rio Grande, and even at rare discounts to Rio de Janeiro.
Source: ENGINE (https://engine.online/)

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