The price of LSMGO in Houston has seen a significant decline in recent weeks, reaching its lowest point since December 2023, reports Engine.
This drop in price has narrowed the spread between VLSFO and LSMGO from $240/mt in mid-April to $160/mt now.
Increase in distillate stocks
In February, the spread was at its peak at $291/mt. Since then, the spread has narrowed by over $130/mt.
One of the key factors influencing this trend is the increase in distillate stocks in the US Gulf Coast region over the past two weeks. This uptick in stocks, by 3.89 million b/d since mid-April, signals a relative decrease in demand for distillate fuels across various sectors.
Although distillate production for LSMGO remains an essential segment in the overall distillate fuel market, its volume compared to sectors like road transportation, aviation, and industrial applications is relatively smaller.
Despite the overall decrease in distillate demand, LSMGO bunker demand has remained stable in Houston. However, lower demand for distillate stocks in other sectors has contributed to keeping the price of LSMGO lower in the port.
Currently, most suppliers in Houston can offer LSMGO stems with a lead time of 3-5 days, indicating good availability in the region.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe!
Source: Engine
