Bad weather has delayed stems in GOLA and Zona Comun, and US Gulf Coast refineries have ramped up fuel oil production after Hurricane Ida struck.
Strong winds and choppy seas halted bunkering at anchorage in Zona Comun on Tuesday, delaying deliveries by several hours. Calmer weather conditions later on Tuesday allowed bunkering to resume.
Another round of strong winds is forecast at the Argentinian anchorage location from Wednesday evening, and set to last until Thursday morning. Deliveries could be disrupted then.
Bunkering in the Galveston Offshore Lightering Area (GOLA) was also disrupted by rough weather on Tuesday. By the time conditions had improved to let deliveries go ahead on Wednesday some stems had been delayed by up to a day.
Bunker fuel oils and gasoil are generally in good availability across key US bunkering areas such as Houston, Los Angeles and New York, with no significant shortages reported. But there are pockets of tightness around the Americas. Uruguay’s Montevideo and Canada’s Montreal have had tight VLSFO availability for some time.
Residual fuel oil inventories in the US have been drawn down to four-week lows amid a sharp increase in supply, weekly data from the Energy Information Administration (EIA) shows.
US fuel oil supply increased by more than a third, and outweighed combined production and imports.
US refineries produced more fuel oil last week, especially on the Gulf Coast, where nothing was produced in the previous week. Several refineries in the region halted or reduced production when Hurricane Ida struck a month ago, and have gradually ramped up run rates towards normal levels.
Imports into the US fell last week, but remained above the averages for previous weeks in September, and in August and July.
Destocking towards the end of the year could create a two-tiered bunker market in the Houston area, with large price spreads between suppliers, sources say. Some suppliers could seek to push higher volumes to reduce product in storage, which is taxed based on how much is left in tanks at the end of the year.
Strategies will vary between suppliers, but if more volumes are supplied as bunkers, barge availability could come under pressure and eventually boost bunker prices in some cases.
Meanwhile, some bunker suppliers would likely lower prices to move more product, so pressure on prices is not likely to be one-sided.
Source: ENGINE, (https://engine.online/)