Boston RBOB premium spikes after tugboat sinks in Boston harbor

Houston (Platts)--18 Feb 2016 520 pm EST/2220 GMT

The premium for RBOB cargoes sailing into Boston harbor spiked to the highest level since December 4 after a tugboat sank in the harbor and choked off incoming supplies, trade sources said Thursday.

The tugboat, which sank early Tuesday in the harbor's North Channel, has restricted all incoming gasoline cargoes.

The premium for cargoes coming into Boston harbor Thursday was talked at 4 cents/gal above the New York Harbor barge market. That premium was 2.25 cents on Monday prior to the incident.

New York barge RBOB was trading at the NYMEX March RBOB futures contract minus 2.60 cents/gal Thursday.

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"We have to get that tug removed," one Boston gasoline trader said. "We have a boat due in today that can't get in. We are looking for an alternate route."

When contacted Thursday, an official with the US Coast Guard in Boston said the North Channel was not shut, but that "we do have a temporary restriction on deep draft vessels entering the North Channel."

"From my experience, most of the deep draft vessels use the North Channel, rather than the South Channel," he added.

A 51-foot tugboat -- the Emily Anne -- sank near Boston's North Channel on Tuesday morning.

According to an update late Wednesday by Moran Shipping Agencies, the US Coast Guard had located only a 20-30 foot section of the tugboat.

"The divers tried to explore more area of the ocean floor to locate the remaining section, but unfortunately darkness set in and they had to exit the water. They did try to do some more sonar imagines of the surrounding ocean floor and they are analyzing that information at this time," Mark Cutter, Assistant Branch Chief for Waterways Management at the US Coast Guard Sector Boston said in an advisory.

A 250-yard safety zone has been instituted until there is further evidence that the channel is clear of any debris from the sunken vessel and/or the remaining sections of the vessel can be located.

--Keefe Borden,
--Deepa Vijiyasingam,
--Edited by Keiron Greenhalgh,

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