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LA jet fuel differentials rise to record before holiday

  • Märkte: Oil products
  • 22.11.23

Los Angeles jet fuel prices have climbed to the widest cash differential to Nymex futures in at least 20 years amid surging demand ahead of the Thanksgiving holiday.

Jet fuel trades for November timing were struck at premiums of 70¢/USG to 90¢/USG above Nymex ultra-low sulphur diesel (ULSD) futures on Tuesday, marking the widest spread since at least April 2003, when Argus began assessing Los Angeles jet fuel prices. Outright jet fuel prices subsequently rose by 37.54¢/USG to $3.724/USG, reaching the highest level in nearly two months.

Tight supply is driving the steep gain in differentials, market participants said. US west coast jet fuel inventories rose by 3.5pc to 8.9mn bl during the week ended 17 November, according to US Energy Information Administration (EIA) data released today. But stockpiles may have thinned early this week on rising demand for Thanksgiving holiday travel. The number of passengers screened at US airports was up by 9.3pc to 7.701mn in the first three days of this week compared to a year earlier, according to the Transportation Security Administration (TSA). The three-day average of 2.567mn passengers per day also was 5.3pc higher than last week's seven-day average of 2.437mn daily passengers.

Last week's inventory growth at the west coast was spurred by higher refinery jet fuel output, which rose by 13pc from the prior week to 416,000 b/d. This offset reduced US west coast jet fuel imports, which fell by 22pc to 51,000 b/d, a five-week low.

Los Angeles jet fuel prices have far exceeded prices in other US regions. The next highest prices were posted at the New York Harbor, which fetched a 62¢/USG discount to Los Angeles on Tuesday. This more than doubled a spread of 28.02¢/USG seen three sessions earlier on 16 November.

US west coast prices are prone to increased volatility in the absence of hefty pipeline shipments from the US Gulf coast, in contrast with US Atlantic coast and midcontinent markets.


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