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ENGINE: Americas Bunker Fuel Availability Outlook

US refinery production has yet to recover from the outages last month, and lower domestic fuel oil production has increased the country’s appetite for imports cargoes.

An unusual blizzard and freezing temperatures in the US Gulf Coast knocked out much of the region’s refinery capacity in mid-February. The refineries have gradually ramped up production, but output of fuel oil and other refinery products is still some way off a full recovery.
Residual fuel oil production dropped by 40% in the US Gulf Coast region last week. Lower production contributed to draw Gulf Coast inventories, which fell by 1% to 17,41 million bbls.

Production across the US fell by 9% on the week to 177,000 b/d.

To make up for the recent production shortfall the US has imported more fuel oil. Imports more than doubled to 234,000 b/d, which is significantly more the weekly averages for the past four months.

Total US fuel oil inventories were almost unchanged from a week earlier, at 31.51 million bbls.

Gulf Coast refinery production is expected to recover to normal over the next two weeks. But a contango in the forward curve for WTI crude futures could incentivise more crude storage and limit refinery intake.

VLSFO is mostly readily available in US ports. Tight supply in New Orleans has widened its premium over Houston to $17/mt. A supplier is adding a bunker barge to its operations around Corpus Christi from April, which is set to boost delivery capacity.

VLSFO has become available in Bahamas’ Freeport again, but volumes are tight and prices vary greatly between stem quantities. LSMGO and HSFO380 supplies are still tight in the Caribbean port.

HSFO380 is also tight in Jamaica’s Kingston, and currently unavailable off Trinidad as well as in Trinidadian ports. Among ports in the Caribbean, Cristobal and St. Eustatius seems to have steady supply volumes of HSFO380. The grade is also available in Aruba and Curacao.

Prompt deliveries of VLSFO and LSMGO are tight in Cristobal, but VLSFO prices in Cristobal and Balboa continue to be among the Americas’ lowest. Only Houston and New York have lower prices, with VLSFO now at slight $3-4/mt discounts to the Panamanian ports.
Source: ENGINE (https://engine.online/)

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