Los Angeles 0.5pc sulphur at discount to Panama

Los Angeles 0.5pc sulphur marine fuel prices have been mostly cheaper compared with Balboa, Panama, bunker fuel prices since mid-August, Argus assessments showed.

Historically, heavy bunker fuel sold in Balboa on Panama's Pacific coast tends to be lower priced than Los Angeles. But this trend could change at the beginning of 2020 as international export sources of low-sulphur fuel oil will be limited for both locations amid increased international demand for the product.

Argus assessments for Los Angeles 0.5pc sulphur marine fuel have averaged $515/t since 12 August, a $38/t discount to the fuel in Balboa. Balboa 3.5pc sulphur marine fuel averaged at $396/t, a $29/t premium to Los Angeles during the same period. Argus first launched Los Angeles 0.5pc sulphur assessments on 20 May.

The four suppliers offering 3.5pc sulphur fuel oil for bunkering in Los Angeles are now also supplying 0.5pc sulphur fuel oil there: Chevron, Minerva, Peninsula and Glencore. But availabilities are spotty.

US west coast low-sulphur fuel oil imports increased in the first eight months of the year, compared with the same period in 2018. Low-sulphur residual fuel oil imports from Argentina were up by 83pc during that period to 18,900 b/d, while imports from Colombia nearly doubled to 16,700 b/d, according to the US Energy Information Administration (EIA). But US west coast low-sulphur fuel oil imports from Brazil were down by 64pc to 4,300 b/d as Petrobras raised its exports to Singapore instead.

EIA data also shows low-sulphur straight run fuel oil imports from Algeria and the Russian far east increasing. But these are typically used by Chevron and BP as refinery feedstock and it is not yet clear if some of them will be sold for bunkering.

In addition to low-sulphur residual fuel oil imports, some of the low-sulphur bunker demand in California could be met by using outright or blending local sweet heavy crude oil.

The impending International Maritime Organization 2020 regulation has reduced US west coast's appetite for high-sulphur resid for bunkering. High-sulphur fuel oil imports to the US west coast from Mexico declined by 30pc to 23,900 b/d, from Venezuela by 80pc to 9,900 b/d and from Peru by 77pc to 2,100 b/d.

source: Argus Media