March rolled in like a lamb and out like a lion for ULSD exports from the US Gulf Coast, which have seen an uptick within the past week, market sources said Monday.
Higher prices in Europe and a refining issue in South America have increased demand for Gulf Coast barrels, trading and shipping sources said.
A trading source said possibly three or four cargoes cargoes have been fixed in the last week -- which is about the typical weekly volume from the US Gulf Coast when the arbitrage to Europe is open.
"Demand to both Europe and South America is very good," the source said.
One shipping source said said he has heard a lot of interest, but is not sure how many ships have been fixed with ULSD in the past week.
The Northwest Europe ULSD cargo cash premium reached a five-month high Thursday, closing $3.75/mt higher on the day at $30.50/mt, its highest since October 1.
Additionally, Columbia is seeking ULSD barrels due to its 165,000 b/d Cartagena Refinery's closure until 2015, a shipping source said.
"We are seeing two market calls a week for vessels," the source said of Columbia.
At the start of March, there was little demand for Gulf Coast waterborne ULSD barrels, as two times during the Platts Market on Close assessment process waterborne barrels were offered even to the prompt pipeline.
Exports have been weak for most of 2014 due to strong demand domestically, particularly Northeast demand for ultra low sulfur heating oil, the same specification as ULSD aside from designated use.