New York—USGC marine fuel reached its highest level in nearly a year Jan. 7 on a rebound in the underlying crude complex along with limited blending components.
USGC marine fuel 0.5%S was assessed at $401/mt, its highest since Feb. 25 when it was assessed at $403.25/mt, S&P Global Platts data showed.Much of this outright price rebound has stemmed from a similar increase in crude that took hold in November.
On Nov. 6 the ICE front-month Brent futures contract was assessed as of 2:30 pm ET at $39.33/b. Since then, the contract has increased by $15.04/b or around 38.2%.
In that same time, USGC marine fuel 0.5%S has increased by $99.50/mt or around 34%.
While USGC marine fuel 0.5%S has slightly lagged the increase in crude since November, the premium of USGC marine fuel 0.5%S has widened from $7.70/b on Nov. 6 to $8.78/b on Jan. 7 assuming a conversion rate of 6.35 when converting from metric tons to barrels.
Sources in Houston and New Orleans said there has been a consistent lack of availability of 0.5%S blending components which has aided the rise of both outright prices and cracks.
One USGC supplier said the region has had to rely on local production for material.
US Energy Information Administration data the week ended Jan. 1 showed US refinery utilization was 80.7%, well below the same period in 2020 at 93%.
One US supplier said there has also not been a corresponding increase in imports to compensate for the lack of local production.
"It's odd because there has been more [material] coming into the region like the Caribbean, but not really into Houston," the supplier said. "It's still quite tight in the front it seems like."
A second supplier said a potential reason for an absence of imports could stem from an extended lack of demand in the retail bunker market that has seen a notable uptick in the new year.
Spot retail 0.5%S marine fuel value rose $6 day on day in Houston to $401/mt ex-wharf, while the New Orleans assessment inched up $1 to $406/mt ex-wharf.
Sources said both Houston and New Orleans were seeing some tightness on avails for the next three to seven days along with congestion issues.
"We are pretty congested but can still squeeze a few in there," the source said of the Houston market.
The New Orleans 0.5%S retail assessment now sits at its highest point since March 6, while Houston value was last assessed this high on Dec. 10, according to S&P Global Platts data.
