Bunker suppliers expect significant weather delays in the Houston area in the coming days, as thick fog has reduced visibility and led Houston Ship Channel to close for vessel traffic.
The channel has been shut since Monday, with vessel traffic blocked in both directions except for outbound traffic resuming for few hours on Tuesday and Wednesday. 41 vessels were waiting to sail inbound and five outbound on Wednesday evening, according to port agency Norton Lilly. Fog is forecast to reduce visibility in the area until Thursday evening and delay incoming ships from bunkering in any of the areas’ ports, including Houston, Texas City, Baytown and Galveston Fairway.
There is more fuel oil in storage across the US as refineries have ramped up production through January. US distillate fuel stockpiles are also significantly higher now than towards the end of last year.
Total US fuel oil stocks grew by 3% in the week to 5 February, when they stood at 33.18 million bbls, official data from the US Energy Information Administration (EIA) shows.
US Gulf Coast inventories, which hold more than half the country’s fuel oil, added 650,000 bbls to 18.46 million bbls – their highest levels since August.
US refineries ramped up their production of residual fuel oil through January, after destocking towards the end of 2020. Between December and January, West Coast refineries increased their production by 14% to 62,000 b/d, and Gulf Coast refineries increased by 20% to 45,000 b/d.
Bunker fuel grades are readily available across most North American ports. Prompt supplies of VLSFO have tightened in New Orleans this week, and HSFO380 remains limited in Vancouver.
HSFO380 is also scarce in several Caribbean and South American ports. The grade is limited in Kingston, Jamaica and Freeport, Bahamas. Brazilian ports stopped supplying the grade in the leadup to the IMO 2020 transition. Inventories have run dry in Callao and off Trinidad.
VLSFO is also getting tighter off Trinidad and LSMGO has run out. Trinidad’s ports still have available supplies of the two low sulphur grades.