| | Copyright violation is a serious offence. Any distribution or forwarding of information which is not expressly permitted by your subscription agreement is a copyright violation. ICIS pricing will be using software to monitor unauthorised electronic redistribution of reports. Copyright 2010 Reed Business Information Limited. ICIS pricing is a member of the Reed Elsevier plc group. | |
Editors Steven McGinn (USA), steven.mcginn@icis.com;
James Dennis (Asia), james.dennis@icis.com;
Vinicy Chan (Europe), vinicy.chan@icis.com
NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”
European jet kerosene prices went up this week on the back of higher crude oil prices, but trading was less active due to a lack of selling interest.
Sellers were reluctant to sell at current price levels as they expected higher prices in the future. Sellers were hoping to make money by sitting on oil storage and exploiting a contango, the state where barrels for delivery further in the future are priced higher than barrels for immediate delivery, traders said.
The strike at Total’s refineries in France had little impact on tightening the supply as the stockpiles were abundant and some airlines continued to sell off excessive barges.
There was a slight increase in demand for jet fuel as Easter travelling season approached, industry participants said.
Barge prices ended the week at $688-690/tonne FOB ARA, up from $671.75-673.75/tonne.
Cargoes finished at $693-699/tonne CIF NWE, up from $689.75-690.75/tonne.
On Tuesday, there was one barge trade but no cargo trade.
In the barge market, a European airline sold a barge of 2,000 tonnes to a trader for 8-12 March at April ICE gas oil plus $48/tonne FOB Rotterdam.
There were six other barge bids but no further offers.
In the cargo market, there were five offers and one bid but no trades.
A European major bid for a cargo of 30,000 tonnes for 20-24 March at April ICE gas oil plus $54/tonne CIF Shellhaven.
A trader offered a cargo of 30,000 tonnes for 12-16 March on a quotes related basis CIF Le Havre.
A Wall Streeter also offered four cargoes of 30,000 tonnes each. Three offers were for 12-16 March and the other one was for 16-20 March. The first was at March ICE gas oil plus $59/tonne CIF Le Havre, the second was on a quotes related basis CIF Le Havre, the third was at March ICE gas oil plus $61/tonne CIF Ghent, whereas the fourth was on a quotes related basis CIF Le Rotterdam.
($1 = €0.74)
| NYMEX Heating Oil Settlement Prices | | | |
| | 23 Feb | Wed | Thu | Fri | Mon | Tue |
| April | 204.26 | 205.39 | 199.86 | 203.53 | 202.35 | 205.61 |
| Jet fuel differentials to NYMEX heating oil futures |
| | 23 Feb | Wed | Thu | Fri | Mon | Tue |
| NYH | +4.25 | +3.50 | +4.00 | +4.75 | +6.25 | +6.50 |
| USG | +1.50 | +0.75 | +1.50 | +1.75 | +3.00 | +2.30 |
US jet fuel prices increased during the week ended 2 March, boosted by a spike in heating and crude oil values. Prices rose by about 4 cents in each region, continuing the trend from the previous week.
In the cash markets, USG cycle 14 jet fuel traded three times at 2.30 cents over the NYMEX April heating oil contract on 2 March.
Elsewhere, NYH jet fuel was done a couple times at 6.50 cents over April. Traders cited decent demand and a need to cover on the Buckeye Pipeline due to the winter storms.
Jet fuel crack spreads gained steam in the NYH region, while inching up in the USG. Jet cracks were assessed at $9.36/bbl for the NYH, up $1.18 from the previous week. The USG jet fuel crack rose 55 cents to $7.58/bbl.
US business flight travel may be on the rise, according to aviation consulting firm Ascend. One-third of business fliers expect their companies to increase travel in 2010, and over one-fourth anticipate heightened travel budgets, the company said.
In economic news, a stronger economy and hints at aviation industry consolidation pushed stock prices at four airline-related companies to reach 52-week highs on 1 March, indicating that Wall Street investors are looking for a turnaround in the US airline industry.
In refinery news, sources said Citgo cut runs at its 167,000 bbl/day Lemont refinery in Illinois, after the crude unit malfunctioned last week. The unit may return to service by the end of the week as repairs were currently under way.
Work continues on a fluidic catalytic cracker (FCC) at Valero’s 325,000 bbl/day Port Arthur refinery in Texas.
In related company news, Valero said an FCC will restart at its 250,000 bbl/day St. Charles, Louisiana, refinery and reach planned rates when other units are restarted. No timeframe was available, according to trade sources.
| Jet Fuel | 12-Feb | 19-Feb | | Change | |
| US Stocks | 42.7 | 43.7 | 2.3% | 1.00 | m bbl |
| PADD 1 | 9.8 | 10.7 | 9.2% | 0.90 | m bbl |
| PADD 3 | 13.8 | 13.4 | -2.9% | -0.40 | m bbl |
| Production | 1,276 | 1,344 | 5.3% | 68 | bbl/d * |
| Demand | 1,225 | 1,235 | 0.8% | 10 | bbl/d * |
| Imports | 64 | 102 | 59.4% | 38 | bbl/d * |
| * figures in thousand bbl |
| Historical Stocks | 2/19/2009 | 2/19/2010 | | Change | |
| Crude Oil | 354.2 | 337.5 | -4.7% | -16.7 | m bbl |
| Gasoline | 216.4 | 231.2 | 6.8% | 14.8 | m bbl |
| Jet Fuel | 42.0 | 43.7 | 4.0% | 1.7 | m bbl |
Source: US Energy Information Administration (week ended 19 February)
The average Asian jet-kerosene price for the week ending 2 March was assessed at $84.90/bbl FOB Singapore, up 42 cents/bbl on the previous week.
Jet-kerosene prices gained rose over the reporting period boosted by a weaker US dollar and threats from Iran that it would cut energy supplies to Europe amid escalating tensions over it nuclear program. However worries over the strength of European economies, particularly cash strapped Greece, led to a strengthening of the US dollar as traders moved out of Euros and sterling which pushed crude and oil products such as jet lower.
Jet demand remained relatively weak in Asia with traders still awaiting news on the outcome of a key purchase tender by leading market player China Aviation Oil (CAO). The Chinese trader had requested three 30,000-40,000 tonne cargoes of jet-kerosene for end March-April loading via a tender which closed back on 25 February
The latest data for the week ending 24 February revealed that Singapore onshore middle distillate stocks including diesel and jet kerosene rose to 14.429m tonnes, up 2.309m bbls or nearly 20% on the previous week.
The stock rise was reported linked to reduced demand for prompt distillates, mostly gasoil, from Vietnam and Indonesia following the restart of refinery capacity after recent unscheduled outages.
Meanwhile, some support has been generated by increased imports of gasoil from Chile following damage to a domestic refinery caused by the recent earthquake. News of increased Chilean imports drove cracks spreads to nine month highs.
There was just one deal during open market trading in Singapore over the reporting period the details of which are listed below.
Wednesday 24 February – 1 deal
130,000 bbls loading 11-15 March from BP to Shell at market quotes minus 70 cents/bbl FOB Singapore
During open market trading on Tuesday 2 March, Mabanaft offered 100,000 bbls of jet for 17-21 March loading at market quotes minus 20 cents/bbl FOB Singapore.
Glencore also offered 200,000 bbls of 17-21 March loading jet at market quotes minus 30 cents/bbl FOB Singapore.
Vitol bid for 250,000 bbls of 28 March – 1 April loading jet at market quotes minus $1.20/bbl FOB Singapore
Itochu bid for 250,000 bbls of 28 March – 1 April loading jet at market quotes minus 70 cents/bbl FOB Singapore
BP bid for 100,000 bbls of 22-25 March loading jet at market quotes minus 50 cents/bbl FOB Singapore
Balance March kerosene swaps traded at 85.10, while balance March gasoil swaps also traded at 85.10. As a result the March regrade, which is the differential between gasoil and jet, was assessed at parity.
The balance March kerosene-Dubai crack was valued at $10.20/bbl, up 35 cents/bbl on the previous week.
