The EIA numbers show that Gulf Coast (PADD III) residual fuel production for the reporting week ending September 17 was 331,000 b/d, up from 225,000 b/d for the reporting week ending September 10.
Trade sources were hard-pressed to explain the bounce, noting ongoing crude unit turnarounds at ExxonMobil's 562,500 b/d refinery in Baytown, Texas, and Citgo's 163,000 b/d refinery in Corpus Christi, Texas.
"There's not a lot of oil," said one trader. "With the turnarounds going on, it is a snug supply. The market's definitely more short than long."
The EIA data showed capacity utilization flat at 89.9% for the second straight week.
At the same time, USGC residual fuel stocks climbed 1.2 million barrels to 19.2 million barrels for the week ending September 17.
"That's a mystery," said a second trader. "I'm seeing quite the opposite. People are living hand-to-mouth right now. Everything that they put in tank, it goes immediately out."
Sources said Gulf Coast residual fuel demand is not especially strong, with the bulk going to RMG 380, and some exports headed to Singapore.
"In general, we're not seeing an awful lot of fuel," said the second trader. "There's just not a lot coming in."
USGC residual fuel on Tuesday hit its highest price compared to crude since late May, pushed by tight near-term supplies.
Platts assessed the USGC benchmark 3%S price at $66.85-$66.90/barrel, down 85 cents/b from Monday.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
