March 31, 2015
Gulf Coast jet fuel inched down Tuesday, but the crack spread rose for the fifth straight trading day.
Jet fuel in the Gulf Coast fell 10 points on the first day of the prompt 19th cycle on Colonial Pipeline and the last day to trade NYMEX April ULSD contracts. Platts assessed the Gulf Coast jet fuel differential at NYMEX May ULSD minus 13.75 cents/gal, or $1.5669/gal on the outright.
Following a day when nearly half a million barrels of jet fuel traded in the Gulf Coast, traders did not exchange any barrels Tuesday in the Platts Market on Close assessment process. This pattern is typical as most traders exchange barrels closer to scheduling day for cycles on the Colonial Pipeline up to Linden, New Jersey. The scheduling day for the 19th cycle is April 6.
The spread between Light Louisiana Sweet crude and Gulf Coast jet fuel has been on the rise the past several days on the back of LLS weakness. Cracks rose almost 30 cents/barrel Tuesday to $12.08/b and nearly $3/b since March 24, when the spread was $9.06/b.
On the Atlantic Coast, a backwardated New York Harbor market crept 45 points higher Tuesday. Platts assessed New York Harbor barges at NYMEX May ULSD minus 5.55 cents/gal, or $1.6489/gal on the outright, with backwardation of about 10 points/day.
On the West Coast, the Los Angeles jet fuel market was unchanged Tuesday after trading lower in the morning.
Platts assessed the Los Angeles jet differential at NYMEX May ULSD minus 4.75 cents/gal, or $1.6569/gal on the outright.
Jet fuel in the region was heard trading as low as minus 5.75 cents/gal before rising again in the afternoon.
Pertamina re-offering kero cargo
Indonesia's Pertamina Tuesday was re-offering 70,000 barrels of kerosene for loading from Plaju over April 7-10.
The tender closes on April 1, with validity till April 2.
According to market sources, the company had offered a similar parcel for loading from Plaju over the same dates. However, the sell tender was subsequently canceled. Reasons behind the cancellation could not be confirmed.
Separately, Pertamina was heard to have bought up to 320,000 barrels of jet fuel for delivery to Surabaya or Jakarta over several dates in April at a premium just below $2/barrel to Mean of Platts Singapore jet fuel/kerosene assessments on a CFR basis.
Seller details were not forthcoming at the time of writing.
In other news, Brazilian state-run oil company Petrobras will exit the refining business in Japan as the company sells off non-core assets to fund massive investments at home, it confirmed Friday.
Petrobras owns 100% of Nansei Sekiyu, the company that operates the 100,000 b/d Nishihara refinery in Okinawa. The company put the refinery up for sale in 2011 as part of a previous divestment plan, but a lack of interest in the unit forced Petrobras to change its plans in 2013 and pull the refinery off the sales lot.
The company "has decided to start its exit plan for Okinawa, Japan," Petrobras said.
The refinery produces gasoline, jet fuel, kerosene and low-sulfur fuel oil, most of which is exported to China. Nishihara is the only refinery on Okinawa. Okinawa has annual refined products demand of around 2 million kiloliters or 34,000 b/d.