Americas Bunkers: Key market indicators June 28-July 2

Increased values in global oil markets keep supporting spot pricing in bunker markets in the Americas, with a heightened strength seen in the last few days to June 28 in the high sulfur bunker, a fuel now only used by ships adapted with scrubbers.

LATIN AMERICA

Latin America bunker markets are expected to continue a firm performance after rising across the board from June 21-26 boosted by crude futures and US wholesale markets, with sources talking about stronger demand in some ports while others are facing sharp domestic competition.

In Panama, where bunkers trade is traditionally done on an ex-wharf basis, marine fuel 0.5%S rose $7 (1.3%) to $549/mt in Balboa, only a tad under the $550/mt peak it reached on June 16, which was the highest level for the port since an equal $550/mt peak on February 4, 2020.

"Demand this week was pretty much stable," a market source said. "More or less the same level as the previous week." Another source pointed to strong liquidity in the Panamanian market amid tight competition.

Marine gasoil, a more expensive bunker with up to 0.1%S content, ended last week assessed at $665/mt, reaching its highest price in more than 17 months, since it was assessed at $680/mt on January 13, 2020.

The sharpest increase on the week was seen in high sulfur IFO 380 in Balboa, as it jumped $17 (4%) to $437/mt, with several deals for volumes of 700-1,000 mt heard at the end of last week.

The advance coincides with a strengthened high sulfur fuel oil bulk market on the US Gulf Coast, which also rose 4% to $64.93/b in June 21-25, supported by a widening backwardation in the paper market and, according to a source, possibly indicating more buying interest from bunker suppliers other than the current refiner feedstock demand for HSFO.

In Brazil, delivered 0.5%S firmed $8 (1.5%) to $547/mt in Santos, its highest level since $553/mt on February 6, 2020. Also in Santos, MGO reached $705/mt on June 25, not before touching $712/mt the previous day, its highest value since $710/mt on January 23, 2020.

Most of the increases were supported by crude futures, which rose for the fifth consecutive week, advancing 1.7% to $76.18/b last week, buoyed by several bullish factors, including expectations of fortified global demand, a moderate increase in OPEC+ output in its July 1 meeting, and a delayed return of Iran's production to the international market.

Argentina, a market with "good demand, but [that is] very competitive," saw a $2 (0.3%) increase in 0.5%S pricing, to $575/mt. Marine gasoil advanced $4 (0.6%) to $712/mt.

NORTH AMERICA

US Atlantic Coast markets will see slow but steady growth in demand, sources say.

Bunker markets on the US West Coast are expected to continue edging higher, as sources say the Asian wholesale markets could be stronger as summer progresses.

On the US Gulf Coast, prices rose over the week ended June 25 following the crude complex and increasing demand. The 0.5%S in Houston rose $5 to $530/mt, while in New Orleans it jumped $7 to $535/mt.

The increases were led by the bulk market for 0.5%S on the USGC, which advanced 2.7% to $536.75/mt.

A sharp $12 jump was seen in high sulfur IFO 380 in Houston, to $410/mt. In New Orleans, the high sulfur bunker also rose $12, to $420/mt.

A few trades were heard for IFO 380/MGO combination stems, which a source attributed to big container ships bunkering in Houston.

The impact of Tropical Storm Claudette on bunkers markets, which made landfall late June 18 and caused widespread rainfall across the Southern US over that weekend, was muted.