In International Shipping News 22/07/2016
Source: Platts
French oil major Total’s US Gulf Coast marine fuel supply division said it will cease regional operations at the end of July, which multiple bunker fuel sources attributed to stiff competition among suppliers and weak margins.
In an email, Total Specialties USA said it “has decided to suspend its US Gulf Coast retail bunker operations” from August 1, but will continue supplying “as usual” through July.
The company’s website lists products available in the Texan ports of Barbours Cut, Beaumont, Freeport, Galveston, Houston, Orange/Port Neches, Port Arthur and Texas City plus Lake Charles in Louisiana. The company supplies RMG and MGO marine fuels.
There are “too many players in the market for them to compete,” a US Gulf Coast marine fuel trader said Thursday. “They are never able to quote. They are quoting for the rest of the month and that’s it.”
Two other suppliers confirmed the situation.
Suppliers in Houston have faced the smallest margins in over a decade as a result of weak supply and demand fundamentals.
Poor demand and ample supply of Houston RMG 380 has intensified the competition, as seven suppliers fight to supply the ships in port that need to refuel.
The Houston bulk-to-retail spread — the difference between spot market high-sulfur RMG 380 and HSFO — has averaged 34 cents/mt during the first 137 trading days of the year, S&P Global Platts data show.
There have been two other times since 1997 — the first year Platts published a daily Houston RMG 380 spot market assessment and also a daily HSFO assessment — when retail RMG 380 averaged less than a $2 premium to HSFO during the first 137 trading days of the year. The premium averaged 40 cents/mt in 1999 and 53 cents/mt in 2002, Platts data show.
Source: Platts
