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Platts Jet Fuel

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Rotterdam jet fuel barges hit fresh-highs amid maintenance, backwardation

London (Platts)--16Nov2017/840 am EST/1340 GMT


Rotterdam jet fuel barges reached a fresh 34-month high of $53.25/mt Wednesday as a premium to the front-month ICE gasoil futures contract, despite high arrivals of cargoes into the region which were expected to make their way to the barge market.

Jet barges first reached a 34-month high of $40/mt October 27 and have since firmed above $50/mt despite expectations that the differential would soften as traders bought cargoes and sold into the barge market amid a high spread between barges and cargoes.

The spread between barges and cargoes also reached a fresh high of $11/mt Wednesday, a five-year high for the spread.

The backwardation in the jet market was still dissuading players from taking cargoes to sell into the barge market however, as the time taken to sell out of tank on to barges would lose money as the volume in tank depreciates in value.

This lack of barge availability has been compounded by turnaround season in Northwest Europe, as regional production is reduced.

Arrivals continued to stack up with November volumes expected to be around 2 million mt, according to cFlow, S&P Global Platts trade flow software.

With volumes from outside the region hesitant to make their way into the barge market and local production reduced, finding product to take on to barges has been difficult.

Traders also said it would take some time for the cargo arrivals to make their way into the barge market due to the time taken to load barges.

Meanwhile, demand for winter diesel in Scandinavia, which has cold properties closer to jet fuel, has also contributed to a shorter jet fuel market in Northwest Europe with less jet produced and some demand for blending into diesel taking volumes out of the market.

Demand for dual purpose kerosene has also been healthy, making up for the lack of demand for jet fuel outside the peak summer demand season.

--Christopher Ewen, christopher.ewen@spglobal.com
--Edited by Jonathan Loades-Carter, jonathan.carter@spglobal.com

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Jet FOB Rotterdam Barg
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