Panama HSFO availabilities tighten

Demand for high-sulphur fuel oil (HSFO) for bunkering was high in Panama in June, July and August, but availabilities tightened as imports fell.

Sales of residual bunker fuel in Panama rose by 5pc to 2.73mn t from January to July 2019, compared with 2.59mn t during the same period in 2018, according to the Panama port authority. But Panama's fuel oil imports dropped by 3pc in the first seven months of 2019, to 2.84mn t, compared to the same period in 2018, according to oil analytics firm Vortexa, as suppliers are looking to reduce their HSFO inventories before the January 2020 marine fuel regulation diminishes demand for it.

Panama imported resid from the US, Ecuador, Peru, Mexico, Colombia, Chile and Canada during the first seven months of 2019. Due to its large storage capacity and geographical location, Panama also serves as a fuel transshipment hub between north America and Latin America. Panama re-exported 180,177t of residual fuel oil to the US, the Bahamas, Mexico, and Nicaragua from January to July 2019. In the past, fuel oil re-exports from Panama have also made their way to Ecuador and Peru to be used for bunkering.

Panama bunker suppliers, much like their global counterparts, are looking into stocking up with 0.5pc sulphur marine fuel ahead of 2020. A shipment of 201,716 bl of low-sulphur fuel oil from Ivory Coast discharged in Panama at the end of August, according to Vortexa. Demand for 0.5pc sulphur bunkers has not yet picked up, with only about one or two inquiries per day. Traders are pegging the Panama 0.5pc-3.5pc sulphur fuel oil premium at around $100/t today.

Marine gasoil (MGO) sales in Panama increased sharply, up 50pc to 310,592t in the first seven months of 2019, compared with 268,778t in the first seven months of 2018. Panama is typically the cheapest Latin American port for MGO. Panama meets all of its distillate demand with imports from the US.