• Prompt product available in USGC ports, West Coast tighter
• US fuel oil production rises after turnarounds
• VLSFO tight amid extended turnaround in Argentina
Suppliers in the Houston area and New Orleans can deliver VLSFO and LSMGO grades prompt, some being able to commit to next-day delivery.
Availability is relatively tighter with certain suppliers on the US West Coast. The earliest delivery date for VLSFO and LSMGO with a supplier in Los Angeles and Long Beach is about 9-11 days out.
US refiners have hiked utilisation rates to the highest level since August last year, producing more fuel oil as a by-product, EIA data shows. Residual fuel oil output has increased by 10% on the month in March.
Refineries on the US East Coast, and especially on the Gulf Coast, have boosted production and built stocks. At 163,000 b/d in the week to 25 March, Gulf Coast production of fuel oil had not been higher than since December 2019, when low-sulphur fuel oil production was hiked in the lead-up to peak demand during the IMO 0.50% sulphur cap transition.
Gulf Coast refinery utilisation has also been helped by major refineries in the region coming out of turnarounds in February and March. The region’s crude distillation unit capacity was estimated to be capped an average of 1.23 million b/d in February, according to Wood Mackenzie.
With more refineries coming out of maintenance, that outage estimate for Gulf Coast refineries came down to 510,000 b/d for March and is forecast to come further down to 431,000 b/d in April, paving the way for higher utilisation and increased gasoil and fuel oil production.
Suppliers in bunker locations off the Gulf Coast have grappled with gale-force winds and heavy swells, delaying bunker schedules for dates going into early April. The areas affected include off Corpus Christi and Sabine, the Galveston Offshore Lightering Area (GOLA) and the New Orleans Outer Anchorage Area (NOLA).
The winds had calmed in GOLA and surrounding offshore bunker locations by Thursday. But bunker deliveries keep getting complicated by high swells and tough conditions, which are set to last until Saturday morning.
VLSFO and LSMGO is in tight availability for prompt dates in GOLA as bunker schedules have been pushed back. Two suppliers can deliver the grades in GOLA with 4-6 days of lead time.
Prompt deliveries of VLSFO and LSMGO can be possible to fit into bunker schedules with just 1-2 days of lead time in Balboa, while others require longer lead times as they await resupply by mid-April.
Certain suppliers have slimmer inventories in Panama, amid more competition for import cargoes and higher resupply costs. According to Vortexa cargo tracking data, Panama has mostly imported fuel oil from regional ports in the US, Mexico and Ecuador, oil storage hubs in St. Eustatius and the Bahamas, and further away sources like Portugal and Algeria in the past month.
VLSFO has been tight in Argentina since a domestic refinery in Campana went into a scheduled maintenance earlier this year.
Production was set to normalise by the end of March, but with resumption pushed back by another week, flows are not expected to ramp up fully until mid-April, Antares Ship Agents says.
Source: ENGINE (https://engine.online/)