New Orleans bunker fuel remained in short supply Thursday, which has caused high-sulfur product prices in that port to spike relative to the nearby and competing Houston market.
New Orleans IFO 380 3.5%S was assessed at $205/mt ex-wharf Thursday based on indications in the market, which were talked in a roughly $100/mt range. Gulf Coast suppliers said tight supply, which caused prices to spike Wednesday, remains an issue that is not expected to be resolved until next week.
A Gulf Coast trader said supply could arrive Sunday "but this may be a little too optimistic."
"More likely it's Monday, December 21, and then hopefully things begin to return to normal," the traded added.
Indications were talked in a wide range, though no deals were confirmed to be done. Sources talked high-sulfur bunker fuel from as low as $170/mt up to $273/mt ex-wharf; however, several sources seemed to think the market was closer to $210/mt, where Shell was said to be offering and where a trade was reported for 500 mt, though it could not be independently confirmed.
The New Orleans-Houston IFO 380 3.5%S spread stood at $77.50/mt Thursday, down from $123.50/mt Wednesday, which was the highest spread since Platts began assessing the two markets in 1990. The Thursday spread compares with the 52-week average of $11.50/mt.
"Think the market may be down from what that one supplier did yesterday," another Gulf Coast source said. "Still high due to tight avails but not in the $200s/mt."
"For ETAs past the 22nd or so there are lower numbers," the source added.
At least three suppliers said prices should come down in the coming days as market players look to get rid of supply before 2016.
"Don't think everyone is tight on fuel in Nola as I heard some levels as low as $170/mt," a Gulf Coast supplier said Thursday. "Heard one supplier there might be 'dumping' in order to drop inventories before year-end," which is a common tactic to avoid taxes.