Updates closing prices.
Gasoline and diesel prices rose in the US Gulf coast and Atlantic coast spot markets today, as participants took stock of production and transportation disruptions following Hurricane Ida.
Ida, now a tropical storm north of Louisiana, forced shut most refinery operations in Louisiana ahead of its landfall yesterday, while power outages today are leading to additional unit outages.
The Colonial pipeline, which distributes fuel from refineries in Texas and Louisiana to consumers along the Atlantic coast, shut its main lines running to Greensboro, North Carolina, yesterday afternoon following landfal, but they are expected to restart this evening. Kinder Morgan's 700,000 b/d Products (SE) Pipe Line system — formerly known as Plantation — may see disruptions later today or tomorrow because of power outages in Baton Rouge, Louisiana.
US Gulf coast CBOB differentials rose this morning to October Nymex +4¢/USG, up by 0.75¢/USG from where trades left off on 27 August. Ultra-low sulphur diesel (ULSD) on the US Gulf coast traded from October Nymex -4.2¢/USG up to -4¢/USG, up from 27 August's -4.7¢/-4.55¢/USG range and marking the highest differentials in four months.
Rare weekend spot market trades
In New York Harbor, the Colonial pipeline shutdown triggered rare Sunday trading at higher differentials, although some of that strength dissipated by this morning. While the spot market typically does not trade on the weekend, traders were eager to secure positions ahead of what they expect to be a fuel shortage and price hike.
ULSD delivered on the Colonial pipeline at Linden, New Jersey, was heard to have traded at around September Nymex +1.4¢/USG yesterday, about 1¢/USG higher from 27 August. Differentials came off today to September Nymex +0.65¢/USG, still higher than the 27 August market.
Similar to diesel, gasoline trades surfaced yesterday at higher differentials, though some of the strength tapered off by this morning. The 29 August gasoline trades were limited to the winter specification, which will become the dominate grade in about two weeks.
In addition, the short-term New York Harbor market shifted into a wider backwardation. RBOB available on 1 September traded at 1.5¢/USG higher than similar barrels delivered on 5 September. This spread is wider than the 0.5-0.75¢/USG seen on 27 August.
New York Harbor prompt summer RBOB cash differentials increased by 0.25¢/USG from where the market left off last week, with a transaction at 0.5¢/USG over the September Nymex contract.
Many in the market remained in reconnaissance mode this morning as refiners assess damages and potential restart timelines.
The September Nymex RBOB contract rose by 3.85¢/USG, or 1.69pc, to $2.3127/USG today and the September ULSD contract rose by 3.11¢/USG, or 1.47pc, to $2.1403/USG at settlement.
These gains in the futures contracts helped lift Colonial pipeline cash prices to a one-month high for gasoline diesel
Limited European cargo bookings
European exporters eagerly followed developments of then-tropical storm Ida at the end of last week, but a UK holiday today limited the number of cargo bookings as of this morning. At least four gasoline cargoes, the Cabak Street, the Horizon Thenao, the STI Yorkville and the Yasa Swan have been booked for 1-3 September loading from Europe on transatlantic routes this morning, a fixture report show.
Around 320,000 b/d of gasoline and blending components have loaded from Europe to New York so far this month, according to estimates from Vortexa. This was up from an average of 220,000 b/d in July, when higher regional demand in Europe limited exports to the US.
The export market out of the US Gulf coast was quiet. A few cargoes booked last week for end-August/early September loading have been cancelled or placed on hold.
