US Gulf floating fuel storage up amid Colonial outage
At least four tankers have been booked to store refined products in the US Gulf coast as refiners in the region seek outlets for production typically transported through the cyber attack-crippled Colonial Pipeline system.
Marathon put the Ayse C Suezmax on subjects for a 15-30 day floating storage contract for $25,000/d, according to shipbrokers, while Valero put the Khawr Aladid long range (LR) 2 tanker on subjects for 20-40 day floating storage for $25,000/d. PBF Energy put the Crimson Pearl medium range (MR) tanker on subjects for a 15-30 day floating storage for $30,000/d, and Phillips 66 fixed the Energy Centurion LR 1 tanker for a 30-60 day floating storage for $30,000/d.
The heightened chartering activity, combined with a surge in oil product export volumes from the US Gulf coast, has helped lift US Gulf coast MR tanker rates to the highest levels since last May — when rates climbed to the highest levels ever assessed by Argus because of a surge in global floating storage demand following the April 2020 oil price crash.
Phillips 66 booked the Elaia MR tanker for a voyage from the US Gulf coast with 13 May loading with discharge options in the Europe and Brazil at WS150 and WS220, respectively. Both rates are up by more than 70pc from where Argus assessed them on 7 May.
Increased demand for Europe-US Atlantic coast oil product shipments to replace volumes typically supplied by the pipeline has also provided upward pressure to MR rates in the Atlantic basin.
"Given the shortage of domestic supply related to the pipeline shutdown, we believe [US] imports will likely increase in the coming weeks as traders respond to pricing arbitrage," investment bank Jefferies said.
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Peninsula eyes B100 marine fuel supply in Barcelona
Peninsula eyes B100 marine fuel supply in Barcelona
London, 24 April (Argus) — Marine fuel supplier and trader Peninsula has added a chemical tanker to its fleet in Barcelona, with a view to supply the port with B100 marine biodiesel. Aalborg meets chemical tanker regulations under the International Maritime Organisation (IMO)'s International Convention for the Prevention of Pollution from Ships (MARPOL) Annex II. This means the tanker can supply marine biodiesel blends containing up to 100pc fatty acid methyl ester (Fame), which conventional oil tankers are unable to do . Oil tankers and barges are limited to up to 25pc Fame. Peninsula added that the Aalborg is also used to supply conventional fossil bunker fuels such as very-low sulphur fuel oil (VLSFO) and marine gasoil (MGO). It is yet to complete a B100 delivery in Barcelona. Market participants pointed to limited demand for B100 in the Mediterranean, but regulatory changes such as the introduction of FuelEU maritime next year may help to support demand for marine biodiesel blends. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vancouver Aframax rates at 6-month lows ahead of TMX
Vancouver Aframax rates at 6-month lows ahead of TMX
Houston, 23 April (Argus) — An oversupply of Aframax-size crude tankers on the west coast of the Americas in anticipation of the Trans Mountain Expansion (TMX) pressured Vancouver-loading rates to six-month lows on 19 April. With the 590,000 b/d TMX project expected to commence commercial service on 1 May, shipowners have positioned more vessels to be on the west coast to satisfy anticipated demand in Vancouver, but that demand has yet to materialize, leaving the Aframax market oversupplied for now, market participants said. Aframax rates from Vancouver to the US west coast began falling in mid-to-late March as an increase of ballasters added to tonnage in the region, helping drop the rate to ship 80,000t of Cold Lake on that route to $1.50/bl on 19 April from $2.55/bl on 21 March, according to Argus data. The rate held at $1.50/bl on 22 April, the lowest since 2 October and just 3¢/bl higher than the lowest rate since Argus began assessing the route on 21 April 2023. Similarly, the Vancouver-China Aframax rate also fell to a six-month low of $6.59/bl for Cold Lake on 19 April, down from $7.78/bl on 2 April, according to Argus data. In addition to the ballasters, two Aframaxes — the Jag Lokesh and the New Activity — are hauling Argentinian crude to the US west coast and are expected to begin discharging on 3 and 6 May, respectively, according to Vortexa. The Argentinian port of Puerto Rosales is mostly restricted to Panamaxes but can accommodate smaller Aframaxes. Downward pressure from across canal A recent slump in the Gulf of Mexico and Caribbean Aframax market, due in part to falling Mexican crude exports to the US Gulf coast , has exerted additional downward pressure, a shipowner said. "Though markets at each side of the (Panama) Canal are different, softer sentiment looms in the region," the shipowner said. Last week, a charterer hired two Aframaxes for west coast Panama-US west coast voyages, the first at WS102.5 and the second at WS95, equivalent to $12.71/t and $11.78/t, respectively, as multiple shipowners competed for the cargoes. The Vancouver Aframax market typically draws from the same pool of vessels as the west coast Panama market. For example, the Yokosuka Spirit , one of the Aframaxes hired to load in west coast Panama, discharged a Cold Lake cargo in Los Angeles on 21-22 April after loading in Vancouver in mid-March, according to Vortexa and market participants. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
USGC LNG-VLSFO discount to steady itself
USGC LNG-VLSFO discount to steady itself
New York, 23 April (Argus) — The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel. US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady. The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before "increasing slightly" in the third quarter. EIA's forecast for all of 2024 averages about $2.20/mmBtu. US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build . Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil. In general, LNG's substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022. By Stefka Wechsler US Gulf coast LNG vs VLSFO $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Kuwait’s KPC agrees VLSFO term supply contract with QE
Kuwait’s KPC agrees VLSFO term supply contract with QE
Singapore, 23 April (Argus) — Kuwait's KPC has signed a term agreement with fellow state-owned firm Qatar Energy (QE) to supply very-low sulphur fuel oil (VLSFO) for loading over July 2024 through to June 2025. The VLSFO supplied amounts to 1.2mn t/yr (21,000 b/d). KPC finalised the term contract at around a $8-9/t premium against the average of Singapore 0.5pc marine fuel spot assessments, according to a source close to the company. QE has expanded its own bunkering infrastructure at the port of Ras Laffan and started relying on VLSFO supplied from Kuwait's 615,000 b/d al-Zour refinery since early last year. The VLSFO supplied is to meet the country's bunkering demand. QE had a previous mini term VLSFO agreement with KPC last year. KPC supplied around 1-2 Medium Range size vessels of VLSFO each month from January 2023 to March this year, according to global trade analytics platform Kpler. The announcement of the term deal left the market unfazed, said a Dubai based fuel oil trader, as KPC has regularly offered term tenders over the year. Supplies to QE has been continuing since last year, with the deal merely being a renewal of their previous agreement, the trader added. This is KPC's third official term contract concluded since the start-up of al-Zour in late 2022. The first term contract was awarded for second-half 2023 loading to Shell, with the second to ExxonMobil for first-half 2024 loading. The terms of the two contracts stated a minimum of 80,000 t/month and a maximum of 720,000 t/month of VLSFO, with KPC having discretion over the total volume. Al-Zour can produce around 11mn-12mn t/yr of VLSFO at full capacity, with around half of it allocated for exports. By Asill Bardh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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