US fuel oil stocks drawn, highest Gulf Coast production since 2019

US fuel oil inventories have averaged 1% lower this month than across February, data from the Energy Information Administration (EIA) shows.

Changes in monthly average US residual fuel oil from February to March (so far):

• Total US stocks down 325,000 bbls to 30.81 million bbls
• Gulf Coast stocks up 190,000 bbls to 19.15 million bbls
• East Coast stocks down 713,000 bbls to 5.28 million bbls
• West Coast stocks up 169,000 bbls to 5.07 million bbls

Much less fuel oil has been supplied out of storage to outlets like bunker fuel blenders and bulk terminals, to refinery coking units for upgrades to other higher-value products, or to power generation. Supply, or implied demand, has more than halved from 361,000 b/d across February to just 132,000 b/d this month – the lowest since October 2015.

Total US fuel oil stocks have declined despite less fuel oil supplied. East Coast stocks have declined by 12% on the month. While Gulf Coast and West Coast have gained by 1% and 3%, respectively. Gulf Coast stocks are at their bulkiest since June 2020.

US fuel oil production has declined by 3% this month. East Coast and West Coast refiners have produced 21% and 12% less fuel oil this month. Gulf Coast production has risen by 4% and hit its highest level since August 2019.

Overall US refinery utilisation has averaged about 88% this month, up from 87% in February. Meanwhile, Gulf Coast refinery utilisation averaged 91% this month, gaining from 87% in February and a low of 65% in January.

High refinery runs on the Gulf Coast have yielded more residual fuel oil as a by-product.

Changes in monthly US residual fuel oil from February to March (so far):

• Supply down 229,000 b/d to 132,000 b/d
• Production down 9,000 b/d to 249,000 b/d
• Imports down 85,000 b/d to 102,000 b/d

The US fuel oil imports have plunged by a massive 45% this month and noted their lowest levels since October 2019. According to cargo tracker Vortexa, about 82% of US fuel oil imports have arrived on the Gulf Coast, followed by 16% on the East Coast and 2% on the West Coast.

Mexico continues to be the US’ biggest import source, as it has been since April, Vortexa data shows. Fuel oil imports from Mexico accounted for 30% of the US’ total in February. And this share has increased further coming into March, with about 37% of imports arriving from Mexico.

The Bahamas (13%) has become the second biggest US fuel oil source by replacing Iraq (10%) this month. Malaysia continues to be the third biggest fuel oil source – a position it has maintained since December.

The EIA’s fuel oil export figures lag two months behind figures for imports and other data. Going by Vortexa data, US fuel oil exports have declined for a third consecutive month. About 95,000 b/d of fuel oil has been exported from the US this month, down from 110,000 b/d in February and 126,000 b/d in January.

Singapore (23%) and the Caribbean Netherlands (20%) have become the US’ top two fuel oil export destinations. India (16%) and Canada (15) hold third and fourth positions.
Source: Engine Technologies