Jet: NY cargo discount deepens March 18, 2014 The New York jet fuel cargo price dropped 5 cents/gal below barges Tuesday as one trader looked to unload 150,000 barrels into the harbor instead of the more common East Coast destination of Florida. Platts assessed New York jet barges with a March 21-25 timing at NYMEX April ULSD futures plus 5.50 cents/gal, down 25 points/gal, after a sharper 4.25-cent/gal decline Monday. But the cargo assessment dropped 4.75 cents/gal to NYMEX ULSD plus 50 points/gal based on ATMI, Totals trading arm, offering a March 29-April 2 cargo of 150,000 barrels into New York Harbor down to plus 75 points/gal. Market sources said ATMI was not the only one bringing in a cargo to the East Coast, and that other supply, such as from Colonial Pipeline, was on the way. Theres a short-term tightness or perceived tightness in the market, one trader said. Cargoes are coming, another trader said. New York is tight, but apparently Florida is tighter. Platts cFlow ship tracking software Tuesday showed four ships exited South Korea bound for the USAC in the first half of February, when New York jet/kero prices were at a steeper premium to South Korean prices. Jet/kero regularly flows to the US Atlantic Coast from North Asia, specifically South Korea. Two of those ships have since entered the USAC: the Torm Sofia on March 5 in Fort Lauderdale, Florida, and the Nave Dorado in Bayonne, New Jersey, on March 9. The Front Dee is due to arrive in Boston March 23, and the Cordula Jacob in Bayonne April 3. The ships were carrying unspecified refined products, although according to US Energy Information Administration data, jet/kero makes up the bulk of USAC product imports from South Korea. In December, for instance, 25,000 b/d of products were imported from the country, all of which was jet/kero. Spot New York jet/kero prices have been mostly at a discount to delivered South Korean jet/kero prices since late February, according to Platts data. However, New York prices were at a premium to South Korean prices earlier in February -- peaking at a $4.47/b premium February 14. While Platts does not publish Florida jet/kero prices, the EIA shows Florida retail jet/kero carrying a premium to New Jersey retail prices over the past year. This suggests an arbitrage to Florida could be open even when it appears closed to New York, considering the shorter distance, and lower shipping cost, to Florida from South Korea via the Panama Canal. Weak Asian demand persists Weak demand from the key aviation sector continued to weigh on Singapore jet fuel/kerosene price differentials, with no letup in sight despite expected refinery turnarounds, sources said Tuesday. Singapore jet/kero was assessed at a 19 cents/barrel discount to Mean of Platts Singapore assessments Tuesday, down 3 cents/b on the day, and down from a 12 cents/b premium March 4. Arab Gulf jet/kero plunged 25 cents/b to be assessed at a $1.45/b premium to Mean of Platts Arab Gulf assessments. Even if supply has fallen because of refinery turnarounds, regional demand is low, said one jet trader. The arbitrage window west from Singapore remained shut, keeping barrels in Asia. Indias private refiners and biggest oil product exporters Reliance Industries Ltd. and Essar Oil have ramped up their shipments to overseas markets in February compared with January, according to shipping data analyzed by Platts. The companies combined jet fuel exports, which typically account for a smaller proportion of Indias export barrels, jumped 83% from January to just over 87,700 b/d in February, the data showed. NWE weak amid steady supply Sentiment in the European jet market remained bearish Tuesday, as weakening premiums in the US and a move in Singapore regrades to at least a two-year low, supported swing barrels moving to Europe given the more favorable netback, data showed. The April Singapore jet gasoil regrade fell further into negative territory to be assessed at minus $1.89/barrel at the Asian close. In Northwest Europe, the spread between jet and ULSD NWE cargo cracks pared gains over recent days, with ULSD cracks moving to around a $1.55/barrel premium to jet cracks. On a normalized [0.845] density basis, jet remained weak, trading at around a $10/mt discount to ULSD, compared with the $14.51/mt discount seen March 5. At these levels, refiners would still be incentivised to maximise ULSD relative to jet, traders said. However, factors including crude run cuts and refineries maximising ULSD production, meant it was unlikely there would be any significant impact on both markets. According to refiners, jet volumes that can absorbed in the ULSD pool were not large and were dependent on the refinery set-up and complexity. Not every refiner can produce 10 ppm sulfur jet and, with those that can, individually it is not great amounts, said a trader. Meanwhile, BP was reported to have the Gulf Baynunah on subs for a 40,000 mt jet cargo expected to load March 23 for a Yanbu to east Mediterranean voyage with options for the UK Continent at a lump sum of around $900,000. Glencore was reported to have the Mahandi Spirit on subs for a 40,000 mt jet cargo expected to load March 26 for a Kuwait-UK Continent voyage at a lump sum of $1.3 million. Source - Platts
Posted on: Wed, 19 Mar 2014 16:57:41 +0000
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