Tight HSFO380 supply in Houston has boosted its price to premiums over other ports, and suppliers are clearing backlogs in Zona Comun after weather delays this week.
HSFO380 supply has tightened in Houston, where its price has risen to parity with levels in normally higher-priced Los Angeles and to premiums over New York, Norfolk, La Libertad, Guayaquil, Balboa and Cristobal.
Several suppliers have been unable to offer the grade for prompt delivery dates in the Houston area, but at least one supplier still has availability.
The US Gulf Coast’s fuel oil inventories have been drawn down this month, to weekly average levels 1.5 million below June. But Gulf Coast refiners ramped up production last week, which helped to lift stock levels by 349,000 bbls.
Fuel oil stocks have also been drawn on the US West Coast, down from a peak of over 6 million bbls in mid-June, to just over 5 million in the second earlier in July. HSFO380 has been tight for prompt dates in Los Angeles and other West Coast ports, but availability has improved in the past two weeks.
VLSFO and LSMGO are readily available in the larger bunkering ports across the US and the Caribbean, with no major shortages reported.
Bunker suppliers in Zona Comun are working through delivery backlogs after highs winds and swell suspended bunkering on Tuesday. Certain suppliers cannot deliver until early next week.
The weather has also calmed to allow for bunkering in Bahia Blanca, but gale is forecast there tomorrow and from Wednesday next week.
Meanwhile, Zona Comun’s bunker demand has been hit by low water levels in the nearby Parana River that has put limits on vessel drafts, as well as by customs regulations that have been in place for months. The combined effect of this has pushing more bunker demand to Bahia Blanca on the Atlantic coast, according to local ship agent Antares.
Water levels in the Parana River have dropped to their lowest point since 1944. Argentina’s government declared a 180-day water emergency on Monday, urging citizens and companies to ration water.
Low water levels and draft restrictions in the Parana River has increasingly led vessels to opt for Bahia Blanca and put pressure the more limited supply capacity there.
Another reason is a less recent customs restriction that prohibits vessels from taking bunkers until they arrive at their last port of call in Argentina. Vessels taking bunkers in Zona Comun will have to prove that it is their last bunker option before sailing out of Argentina, and that they will not call at other bunkering ports such as Bahia Blanca.
Source: ENGINE (https://engine.online/)