The Los Angeles jet fuel differential tumbled 2.50 cents in the last week, including 75 points Monday, as the arrival of a larger-than-normal vessel weighed on the market.
Platts assessed Los Angeles at NYMEX December minus 6.25 cents/gal in another active day of trading. Other regions were relatively unchanged, with benchmark Gulf Coast jet down 30 points to minus 11.20 cents/gal. Platts assessed the NYMEX December ULSD futures contract at $2.918/gal.
More deals than usual have been heard in Los Angeles since Tuesday, November 12, when the differential was minus 3.75 cents/gal.
The Chrisopigi Lady entered Los Angeles over the weekend to unload at least part of its 509,000-barrel, LR1-sized cargo, larger than the typical MR-sized ships that carry 300,000 barrels. The ship started October 26 from South Korea carrying jet fuel for Valero, according to sources and Platts cFlow vessel-tracking software. A Valero trader did not respond for comment.
It may unload part of the cargo and head through the Panama Canal to the US Gulf Coast or Florida, one source said.
A second trader said the outlook for further imports looked bleak beyond the Chrisopigi Lady. "That was fixed awhile back," he said. "Now production is higher and demand lower."
Platts cFlow showed one ship headed for the US West Coast from Asia, the Maersk Borneo, which at 195,000 barrels and loading now in Taiwan, is less likely to carry jet fuel. The Challenge Phoenix, carrying 327,000 barrels a few days out from Japan, lists a Houston destination and December 10 estimated arrival.
US traders are looking more at exports thanks to flush inventories and Europe looking like it will drop a 4.7% duty on US imports as of January. More MR- and LR-sized cargoes are likely to ship out next year on extra draws opening from Europe, said a third source, "especially as long as the marginal cost of crude is lower in the US."
