Total US fuel oil production is on track to decrease this month after output declined last week by the largest amount since February 2022, data from the Energy Information Administration (EIA) shows.

Changes in monthly US residual fuel oil from April to May (so far):
• Production down 19,000 b/d to 283,000 b/d
• Supply up 70,000 b/d to 238,000 b/d
• Imports up 21,000 b/d to 110,000 b/d

Gulf Coast and East Coast refiners have led the decrease and produced 15% and 9% less fuel oil so far this month, respectively, while West Coast and Midwest refiners have produced 8% and 16% more.

Overall refinery utilisation has averaged 92% this month, a percentage point higher than in April.

Much more fuel oil has been supplied out of storage to outlets like bunker fuel blenders and bulk terminals, to refinery coking units or to power generation. Supply, or implied demand, has surged from an average of 168,000 b/d across April, to 238,000 b/d this month.

The US fuel oil stocks have grown to well over 30 million bbls and have remained above this threshold for five consecutive months. East Coast and Midwest stocks have gained by 7%. West Coast stocks, on the other hand, have declined by 3%.

Monthly average US fuel oil supply, imports and production since January 2021

Monthly average regional fuel oil stocks in the US since January 2021

Changes in monthly average US residual fuel oil from April to May (so far):
• Total US stocks up 997,000 bbls to 32.83 million bbls
• Gulf Coast stocks up 705,000 bbls to 20.16 million bbls
• East Coast stocks up 425,000 bbls to 6.60 million bbls
• West Coast stocks down 158,000 bbls to 4.93 million bbls
US fuel oil imports have increased by a steep 24% – up from 89,000 b/d in April to 110,000 b/d this month. According to cargo tracker Vortexa, about 64% of US fuel oil imports have arrived on the Gulf Coast, followed by 23% on the East Coast and the remaining 13% on the West Coast.

The Caribbean Netherlands has taken over as the US’ biggest fuel oil import source, while the previous biggest source, Mexico, has slid into fourth position, Vortexa data shows. Mexico had been the US’ top fuel oil import source for a year prior to this, while Caribbean Netherlands had not been among the top five sources for at least the past year.

Fuel oil imports from the Caribbean Netherlands, which has large oil storage facilities near St. Eustatius, have accounted for 32% of the US’ total so far in May. Mexico, which accounted for 41% in April, has only been the source of just under 12% of US fuel imports this month.

Algeria remains the second largest US fuel oil import source with 27% of imports this month. Last month, Algeria accounted for a lower 17% of the imports.

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 by almost 32% between April and this month.
India has retained its position as the top importer of US fuel oil for a second straight month, taking almost 28% of the total US exports so far. The Netherlands has taken second position with over a quarter of exports, followed by the Bahamas with 23%.
Source: Engine