S&P Global Platts assessed Savannah IFO 380 CST bunker fuel at $373.50/mt ex-wharf Thursday, up $3.50/mt on the day, amid talk of tight supplies and rising crude oil prices.
This brings the product to its highest level since June 30, 3015, when it settled at $380/mt ex-wharf, Platts historical data show.
According to a marine operations specialist with business in Savannah, IF0 380 supply is extremely tight there and it is unclear when new product will arrive.
A trader with business in Savannah agreed that supplies were very thin, but found this unsurprising.
"Savannah is a niche market with only small volumes of product available at any given time," he said. "For the past couple years, Glencore has been the only physical supplier, so the pricing structure there depends more on their local operations than global fundamentals."
Glencore is the sole physical bunker supplier in Savannah.
"Glencore supplies East Coast ports from a variety of locations including the US, Canada, South America, and the Caribbean, the trader said. "This means that Savannah is competing with New York Harbor and other larger ports for barrels. If Glencore has selling obligations in those more liquid locations, sending less product to Savannah is one way to help meet them."
This explains why Savannah IF0 380 prices tend to fluctuate between a significant premium to the same product in New York Harbor and pricing parity, the trader added.
A Glencore spokeswoman in the UK declined comment on availabilities in Savannah.
Platts historic data show that New York and Savannah IFO 380 were last assessed at the same level on September 12, 2016, when they both closed at $263/mt ex-wharf.
As of Thursday's assessment, Savannah IFO 380 sits at a $39.50/mt premium to New York Harbor, a slight decrease from Wednesday's $42.50/mt.
Sources also said that IFO 380 prices across the map are receiving support from climbing crude prices. Platts assessed front-month ICE Brent at $56.05/b Thursday, up from $54.90/b at the start of the week. A port report for Savannah also shows one of the docks is slated for upcoming repair work that will limit line handling access, which could slow vessel loading and add further support to bunker fuel prices there.
