Utility demand in Argentina for 1.0%S residual fuel oil has kept exports brisk in the US Atlantic Coast, dropping stocks there to a new low, sources said.
Atlantic Coast fuel oil stocks fell 200,000 b/d to 7.7 million barrels, according to data released by the US Energy Information Administration on Wednesday. That is the lowest level since the EIA began tracking fuel oil stocks in the region.
That is the fourth time this year stocks have dropped to a new low. The closing of Northeastern refineries at a time when fuel oil is largely being sent to Asia instead of the Atlantic Coast has rapidly reduced available supply, sources said.
That comes at a time when remaining demand for fuel oil in the hemisphere is in Latin America for winter power and heating demand, pulling barrels out of New York Harbor and sending them south, a regional fuel oil trader said.
"The region is short barrels because of Argentina," the trader said.
The loss came entirely in the Central Atlantic, which contains New York and Pennsylvania, and where stocks fell to 5.2 million barrels from 5.4 million barrels. The majority of regional exports leave through New York Harbor.
Stocks in New England and the Lower Atlantic were stable at 500,000 barrels and 2.1 million barrels, respectively.
Brazilian producer Petrobras has recently begun to export 1.0%S fuel oil to New York Harbor, with the first cargoes expected mid- to late May, which may ease some of the current supply concerns.
However, many of those barrels are likely to be snapped up and sent back down to Argentina, another trader said.
