• 5 minutes THE GREAT OIL PRICE PREDICTION CHALLENGE OF 2018
  • 8 minutes So oil touched $80! (WTI break $71 twice). What does the future hold?
  • 14 minutes China Tariff Threatens U.S. LNG Boom
  • 8 hours Realism Replaces Unlikely Bromance: Macron and Trump Aren't As Chummy As They Used To Be
  • 39 mins Tesla’s Powerpack Battery in Australia Made up to $17 Million
  • 9 hours The Warning Lights: Full-Blown Trade War Would Cost Jobs, Growth And Stability
  • 8 hours Lucid Motors Partners With Electrify America For ‘Ultra-Fast’ Charging
  • 3 hours Saudi Aramco IPO Seems Unlikely
  • 7 hours Barrick to Buy Randgold
  • 7 hours Global Hunger Continues to Grow Driven By Climate Change
  • 3 hours The moves toward 'zero-manning' in oil & gas
  • 1 day Downloadable 3D Printed Gun Designs, Yay or Nay?
  • 15 hours Threat: Iran warns U.S, Israel to expect a 'devastating' revenge
  • 15 hours Will Robots Bring The Demise Of European Artistry?
  • 1 day 100% Renewables will Fuel the Growth of Poverty and Homelessness
  • 1 day Why Are the Maldives Still above Sea Level?
Alt Text

Why OPEC Didn’t Intervene In Oil Markets

The OPEC+ meeting in Algiers…

Alt Text

Nuclear Power Could Be Key In Reaching Climate Goals

The 2-degree Celsius scenario of…

Alt Text

Why U.S. Electricity Sales Surged In 2018

U.S. electricity sales have had…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Hurricane Damage To Trigger Fuel Glut

Oil

Damage from hurricanes in the Caribbean, which sends a substantial amount of fuel oil to the U.S. Gulf Coast, could lead to a glut of the fuel, S&P Platts reported, citing sources with knowledge of the situation.

Hurricanes Irma and Maria, which made landfall in the Caribbean over the last two weeks, damaged several fuel storage terminals in the region, which are used to store fuel oil coming from the U.S. Atlantic coast, Europe, and Latin America. The fuel is then sent on to the Gulf Coast, Panama, and Asia.

After the damage, however, a lot of the fuel oil originally sent to the Caribbean terminals will likely be rerouted to the Gulf Coast, where there is already more than enough fuel oil. S&P Platts spoke to traders and brokers who said that cargoes of fuel oil are already being diverted and that this will add to a swelling glut. The glut was partially caused by increased fuel oil production: last week, the fuel oil yield from Gulf Coast refineries hit 3.8 percent, the highest since the beginning of 2014.

The situation, unless it changes quickly, which is unlikely, could have a dramatic effect on fuel oil prices. According to S&P Platts’ trading sources, currently the market for benchmark High Sulfur Fuel Oil on the Gulf Coast is in normal backwardation, with the spot price as of last Thursday at a premium of US$1.80 a barrel to the October HSFO swap. Related: Is Artificial Intelligence The Next Step In Total's Tech Push?

The spike in prices came in the wake of Hurricane Harvey, when supply was limited and traders were eager to fulfill their orders. Naturally, this premium spurred greater interest in spot deals with the cargoes shipped to Houston. One such cargo, a bulky 500,000-barrel one, should arrive in Houston at the end of the month.

With supply swelling so fast, the backwardation could fast become contango, the sources warned, if a lot of fuel oil gets marketed in Houston instead of the Caribbean.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News