April 27, 2015
The Gulf Coast jet fuel market jumped Monday on bolstered spot market buying interest on scheduling day for cycle 23 on the Colonial Pipeline.
Platts assessed the Gulf Coast jet fuel differential up 1.25 points to NYMEX May ULSD minus 14.25 cents/gal, or an outright price of $1.7792/gal.
With another 375,000 jet fuel barrels traded on the final day to schedule, a total of 1.075 million barrels were exchanged during cycle 23 in the Platts MOC. Both refiners like Phillips 66 and trading houses like Noble were active buyers Monday.
Traders have increased their volumes in the Platts MOC over the past several cycles. During cycles 20 and 21, 1 million and 1.2 million barrels of jet fuel traded, respectively, while volumes during cycle 22 returned to an average level of 725,000 barrels.
The jet fuel market in New York Harbor fell 30 points as the market shifted to trading against the NYMEX June ULSD futures contract.
The New York Harbor jet fuel barge differential was assessed at NYMEX June ULSD minus 7.25 cents/gal, or $1.8529/gal on the outright.
The up-down, the spread between the Gulf and Atlantic coasts, continued to narrow for the third day in a row Monday to 7.35 cents/gal.
The typical cost of shipping refined products to New York Harbor on Colonial Pipeline is about 4.50 cents/gal before taxes. Line 2 line space was assessed at 1.70 cents/gal.
On the West Coast, Los Angeles jet fuel strengthened again Monday as Phillips 66 was heard buying jet fuel while their Wilmington, California refinery is undergoing planned maintenance on a compressor.
Platts assessed the Los Angeles jet differential at NYMEX June ULSD minus 2.40 cents/gal, or an outright of $1.9014/gal.
Meanwhile, Flagship Privet was seen heading toward Los Angeles from Japan and was estimated to arrive May 10, according to Platts cFlow ship-tracking software Friday. Sources said the Panamax was carrying jet fuel.
Another ship, the Torm Laura, was heard fixed by BP to carry jet fuel for the US West Coast, departing from Japan. BP's Cherry Point refinery in Washington is currently in turnaround.
Egypt's Middle East Oil Refinery, or Midor, was offering 30,000 mt of jet fuel Monday for loading from Dekheila, Alexandria, over May 20-June 1.
The tender closes on April 28, with validity until April 30.
India's Mangalore Refinery and Petrochemicals Ltd. was heard to have awarded its sell tender for jet fuel at a discount of around $1.80-1.90/barrel to the monthly average of Mean of Platts Singapore jet fuel/kerosene assessments, on an FOB basis.
That 40,000-mt cargo is slated for loading from New Mangalore, west coast of India, over May 18-20. Vitol was said to be the buyer. MRPL last awarded a similar parcel of jet fuel loading over March 18-20 to Vitol at a $1.20-$1.30/b discount to the March average of MOPS jet fuel/kerosene assessments on an FOB basis.
The Asian jet fuel/kerosene market continued to be pressured by poor buying interest during the traditional lull season in the second quarter. Adding to the bearishness, a prevailing closed arbitrage from Asia and the Middle East to the West of Suez has further exacerbated the ample availability.
In the key China market, an increase in jet fuel output has also added to the supply glut in the region, with production of the fuel over January to March this year up 23% against the same period of 2014 to 8.668 million barrels, data from the National Bureau of Statistics showed.
Net exports of jet/kerosene out of the country rose by 15% from last year to 1.57 million mt for the first quarter, separate data from China's General Administration of Customs showed.
Furthermore, with fresh additional cargoes from the Middle East stemming from refinery expansions and new start-ups, sources reiterated that suppliers were struggling to find homes for their barrels following the close of the seasonal winter demand in the Northern Hemisphere during December-February.
Abu Dhabi National Oil Company -- or ADNOC -- was heard to be offering 95,000 mt of jet A1 for loading from its recently expanded Ruwais refinery for loading over May 29-31.
The tender closes April 28 with validity until April 30.
Since commercial activities began at the upgraded facility in mid-March, ADNOC has offered 95,000 mt jet parcels about every two weeks. Total was heard to have been awarded the last tender for loading over May 14-16 at a premium of around $1.80-$1.90/barrel to FOB MOPAG jet fuel/kerosene assessments.