High sulfur bunker prices rose to a 15-month high in Balboa, Panama, Tuesday on a day when residual fuels fell, underscoring the lack of availability for product that market participants have been reporting for several weeks.
S&P Global Platts assessed prices for IFO 380 CST grades in Latin America's biggest market for bunker fuel up $6.50 to $292.50/mt based on indications, the highest since hitting $296.50/mt on July 21, 2015. That increase brought the spread with same product in Houston to $28.50, the widest since January 6, 2016, when it hit $31.
"Panama avails remain very, very tight until around the first week of November," one US-based physical supplier said. Some traders and suppliers with business in Panama have speculated that the recent tightness is partly due to one physical supplier unable to take delivery of two vessels of product because of financial problems. One Panama-based trader said today they had confirmed that those vessels were unloading and that the reports appeared to be rumor, information Platts was unable to independently confirm or disprove.
"The tankers are alongside the terminal discharging," the trader said. "One right now, one later today."
Asked why prices continued to rise in Panama even as feedstocks were falling, the trader said, "Because no one can offer or only one supplier can offer, depending on quantity and dates."
Front-month Brent crude fell 77 cents/b, or $5.84/mt, to $50.70/b, while US Gulf Coast HSFO dropped 45 cents/b to $40.21/b.
