Limited jet availability in the US Gulf Coast market sent differentials up nearly 4 cents Thursday on both the Gulf and Atlantic coasts.
Platts assessed Gulf Coast jet fuel at the NYMEX January heating oil futures contract minus 1.50 cents/gal, up 3.95 cents.
Traders said refiners have already unloaded most of their barrels due to end-of-year tax selling. So, sellers are now hard to find, similar to the situation in Gulf Coast ULSD (see story, 2242 GMT).
"The sellers have all gone home for the holidays," one trader said. "Vacation time."
Atlantic Coast jet fuel was assessed for Buckeye Pipeline and New York Harbor barges at plus 10.375 cents/gal, up 3.875 cents.
At 3:15 p.m. EST (2015 GMT), the NYMEX January contract was assessed at $3.0577/gal, up 2.43 cents. The contract settled at $3.0575/gal, up 2.19 cents.
"Jet prices made a nice move," a trader said. "Gulf Coast was stronger today."
"People do not have jet in tank, so if you did, you got the prize," a broker said.
The Houston-to-New York Colonial Pipeline delivered jet fuel in the 66th cycle on December 19, according to the company's shipping schedule. The next cycle delivers on December 23.
Traders take market structure into account when eyeing the arbitrage, because it takes 15-20 days to ship on Colonial Pipeline. On Thursday, the NYMEX February contract was backwardated by 89 points to the front-month contract.
The USAC premium to USGC product, or "up-down," was 11.875 cents/gal, down 7.5 points. The shipping cost on the Colonial Pipeline was 4.509 cents. The premium was above Colonial's tariff for the 64th straight trading day.
