ENGINE: Europe & Africa Bunker Fuel Availability Outlook
A slowdown in eastward fuel oil cargo flows has left more fuel oil in storage in ARA. Independent inventories holding low and high sulphur fuel oils swelled to nine-month highs in ARA last week.
While there has been plenty of fuel oil in storage, ARA’s bunker suppliers have had busy barge schedules and pockets of tightness for VLSFO in recent weeks.
LSMGO has been offered in a wide price range in ARA this week, with some suppliers eager to move product. ARA ports’ LSMGO discounts to regional ports such as Skaw, Gothenburg and Hamburg have widened beyond $30/mt.
ARA’s gasoil inventories dropped to four-month lows last week. But a pick-up in refinery runs coupled with a tentative road fuel demand recovery could eventually lead to a build-up in gasoil stocks in the hub and contribute to put downward pressure on prices.
HSFO380 stems still need to be booked 3-4 days ahead in ARA and the Gibraltar Strait ports to ensure supply. Lead times for HSFO380 stems are about twice as long in Las Palmas. Two VLSFO cargoes arrived in Las Palmas from Sweden and Spain last week, and three more are scheduled to arrive this week to replenish stocks. HSFO380 stocks are not due for replenishment until next week, sources say.
HSFO180 continues to be in short supply in Durban and Port Elizabeth. Nearly half of South Africa’s refinery capacity has been offline since an explosion and fire at two plants last year, limiting domestic production capacity of the grade. Imports have been limited to gasoil and low sulphur fuel oil, according to sources. This has sustained pressure on scarce HSFO180 supplies. VLSFO and LSMGO stems are more readily available.
Suppliers in Port Elizabeth are grappling with backlogs in the wake of last week’s weather disruptions. Strong winds and high swell disrupted bunker operations at the Algoa Bay anchorage by Port Elizabeth last week, leading to heavy delays. Deliveries are now being carried out and the weather looks calm for the coming days with the exception of a few hours of strong winds on Thursday night.
Strong winds and swell hit Gibraltar Strait ports on Wednesday. Five vessels were waiting to bunker in Gibraltar in the morning, and bunkering was suspended at Algeciras’ Delta anchorage. Several suppliers are delayed by a few hours in both ports.
Rough weather has limited bunkering to one in six offshore areas off Malta at the start of the week. Intervals of strong winds are forecast over the coming days, potentially disrupting offshore bunkering in one or more of the offshore areas.
Stormy weather has hampered bunker deliveries in Russia’s Novorossiysk and Taman intermittently since last week. The weather is forecast to calm in the two Black Sea ports on Wednesday afternoon, which might open for bunkering. Strong wind gusts are forecast again for a short period in the afternoon on Thursday, before several days of calmer weather will allow suppliers to work through backlogs.
Source: ENGINE (https://engine.online/)