Argus Jet Fuel. Contents. Overview. Thai airports' 2017 air passenger traffic rises. Issue Wednesday 31 January 2018

Transcription

1 Latest news Overview Thai airports' 2017 air passenger traffic rises CDU maintenance at Kuwait's Mina al-ahmadi refinery Tupras issues tender to buy jet fuel Florida jet fuel shipments not interstate: judge US jet stocks up by 763,000 bl: EIA Singapore jet fuel swaps fell less than Dubai crude. Singapore jet prices this month were the highest since May Northwest European jet fuel cargo and barge premiums to Ice February gasoil rose sharply as a result of tightening regional supply. US jet fuel differentials mostly gained on Wednesday, despite the release of inventory data which showed a build in nationwide inventories. News Thai airports' 2017 air passenger traffic rises Passenger throughput at Thailand's airports rose in 2017, driven by the country's flourishing tourism industry and frequent visits from Asian travellers. Thailand airports hosted mn passengers in 2017, 9.4pc more than in International passenger throughput rose by 10.8pc from a year earlier to 75.79mn. The airports hosted 57.33mn domestic passengers in 2017, 7.6pc higher than in Passenger throughput using low-cost carriers increased by 14.2pc from a year earlier to 62.49mn. The airports handled 1.64mn t of air freight and mail in 2017, 9.5pc up on There were 833,082 aircraft movements in 2017 at Thai airports, a 5.4pc increase from Price summary Price $/t Singapore * South Korea * Mideast Gulf * Rotterdam * New York * Houston * Los Angeles * Change on day $/t Singapore * South Korea * Mideast Gulf * Rotterdam * New York +0.04* Houston +0.43* Los Angeles +0.68* *assessed unit New York barge prompt jet fuel Contents News 1-5 Argus Market Map 5 Commentary 6-7 hhhh 27 Oct Nov Dec Jan 18

2 There were 401,829 low-cost carrier aircraft movements in 2017, a 12.3pc increase from CDU maintenance at Kuwait's Mina al-ahmadi refinery Kuwait s 440,000 b/d Mina al-ahmadi refinery is undergoing planned maintenance at its third crude distillation unit, which has a 120,000 b/d capacity. The turnaround will likely last for 30 days, although this could not be confirmed. As part of a near $16bn clean fuels project (CFP), the Mina al-ahmadi refinery is being integrated with the 265,000 b/d Mina Abdullah refinery. The goal is to raise their combined capacity to 800,000 b/d through the expansion of the latter and boost output of higher quality fuels. Problems with the integration of the Mina al-ahmadi refinery mean that the CFP is facing a delay of 2-4. Kuwait's state-owned refiner KNPC had expected to complete the venture by [the end of 2018]. Tupras issues tender to buy jet fuel Turkish refiner Tupras has issued a tender to buy 30,000t of jet fuel. The tender is for delivery 1-10 February cif Aliaga. Market participants said it would close in a few days. An earlier tender issued by Algerian state-owned refiner Sonatrach was awarded to Spanish firm Cepsa, for 30,000t of jet fuel. The cargo will load in Skikda around 15 February and was bought at a $13/t premium to fob Med High. Announcement Argus successfully completes annual Iosco assurance review Argus has completed the sixth external assurance review of its price benchmarks covering crude, products, biofuels, thermal coal, coking coal, natural gas, biomass and petrochemicals benchmarks. The review was carried out by professional services firm PwC. Annual independent, external reviews of oil benchmarks are required by international regulatory group Iosco s Principles for Oil Price Reporting Agencies, and Iosco encourages extension of the reviews to non-oil benchmarks. For more information and to download the review visit our website How-We-Work/ Egyptian state-owned EGPC issued a rare tender earlier this month to sell 27,500t jet fuel fob el Dekheila loading at the end of February. The tender closed today. Market participants said the Mediterranean was well supplied with around five cargoes on offer over the next month, which are currently unplaced. Florida jet fuel shipments not interstate: judge Interstate tariffs should not apply to Florida pipeline deliveries of jet fuel delivered by vessel from other US states, a federal administrative law judge has decided. Airlines last year sought Federal Energy Regulatory Commission (FERC) authority over tariffs on the Central Florida Pipe Line, delivering from Tampa to Orlando, Florida. Because the state lacks refineries, movements to and through storage into the pipeline were essentially part of a larger interstate effort, they argued. And because the state lacks a regulator of pipeline tariffs or administration, the airlines wanted a federal avenue to dispute pipeline operator Kinder Morgan's policies. But jet fuel delivered from other states by barge or tanker rested for testing in Tampa storage before entering the pipeline, breaking the flow of product and making the movement intrastate, an administrative law judge said this week. FERC trial staff agreed with Kinder Morgan in the case, finding that the movements were not subject to the Interstate Commerce Act. American Airlines, Delta Air Lines, Southwest Airlines and UPS had not proven that products move continuously from US Gulf coast docks to Orlando and other airports inside the state, the judge said. Product waits for testing and co-mingles in storage for New York jet fuel premium to WTI crude $/t 3 Aug 17 2 Oct Nov Jan 18 hh Page 2 of 8

3 Argus global spot market prices Daily spot prices Contract averages Differentials Prices Prior week Prior month Current MTD Asia-Pacific Timing Basis Low High Mean Low High Mean Mean Mean Mean Singapore fob cargo Prompt Mops South Korea fob cargo Prompt Mops Japan c+f cargo Prompt Mideast Gulf Timing Basis Low High Mean Low High Mean Mean Mean Mean Mideast Gulf fob cargo Prompt Mopag Mideast Gulf fob diff to Ice Prompt Ice Africa Timing Basis Low High Mean Low High Mean Mean Mean Mean Durban c+f cargo $/t Prompt West Africa delivered $/t Prompt FSU Timing Basis Low High Mean Low High Mean Mean Mean Mean Moscow formula incl VAT Rbs/t Prompt , , , , Moscow formula ex VAT $/t Prompt Ice Moscow spot fit incl VAT Rbs/t Prompt ,500 45,100 43,800 43,800 44, , Moscow spot cpt ex VAT $/t Prompt Chimkent fca incl VAT $/t Prompt Pavlodar fca incl VAT $/t Prompt na na na Europe Timing Basis Low High Mean Low High Mean High High High Northwest Europe fob cargo $/t Prompt Northwest Europe cif cargo $/t Prompt Northwest Europe fob barge $/t Prompt Mediterranean fob cargo $/t Prompt Mediterranean cif cargo $/t Prompt Ice Mediterranean cif diff to Med fob $/t Prompt fob US Timing Basis Low High Mean Low High Mean Mean Mean Mean New York cif waterborne 54 grade Prompt Mar New York del Colonial 54 grade cycle 4 Feb New York fob barge 54 grade Prompt Mar New York fob Buckeye 54 grade Prompt Mar Philadelphia fob Laurel 54 grade Prompt Mar del Port Everglades, FL 54 grade Prompt del Tampa, FL 54 grade Prompt US Gulf fob waterborne 54 grade Prompt Mar US Gulf fob Colonial 54 grade cycle 8 Mar US Gulf fob Colonial 54 wgt avg Prompt Mar Tulsa fob Group Three Q grade Prompt Feb Chicago fob Prompt Mar Los Angeles fob Prompt Mar LAX fob Prompt Mar San Francisco fob Prompt Mar Argus US Jet Fuel Index Prompt Latin America Timing Basis Low High Mean Low High Mean Mean Mean Mean del east coast Mexico Prompt del Rosarito Prompt del Lazaro Cardenas Prompt more than a week before pipeline shipments out of Tampa, breaking the movement into an intrastate shipment, the judge wrote. But FERC may need to review the standards it uses to determine interstate versus intrastate shipments, and should consider airline arguments that Kinder Morgan was over-recovering costs by 56.7pc, the judge added. Kinder Morgan said it was pleased with the decision and with its chances before the commission. Airline representatives could not be immediately reached for comment. US jet stocks up by 763,000 bl: EIA US jet fuel inventories rose by 763,000 bl for the week ended 26 January, according to data from the Energy Information Page 3 of 8

4 Argus jet fuel forward curve Singapore cargo swap Northwest Europe cargo swap $/t New York barge Houston Colonial pipeline Timing Mean Change Mean Change Timing Mean Change Timing Mean Change Month Prompt cycle Month days fwd cycle Month days fwd cycle Quarter days fwd cycle Quarter Quarter Spot market deals done Market Spec Timing Basis Price Volume fob ARA Jet A Feb Ice gasoil Feb t fob ARG Jet A Feb Mops t NYH Buckeye Jet A 5 Feb Mar Nymex bl NYH Buckeye Jet A 5 Feb Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl USGC Colonial Jet A 8th Cycle Mar Nymex bl LA Jet A Feb Mar Nymex bl LA Jet A Feb Mar Nymex bl LA Jet A Feb Mar Nymex bl Argus jet fuel premium to gasoil Prior week Prior month Prior three Prior six Singapore jet vs 0.5% Rotterdam jet vs 0.1% Houston jet vs heating oil Argus jet fuel premium to crude Prior week Prior month Prior three Prior six Singapore jet vs Dubai Rotterdam jet vs Brent Houston jet vs WTI Related markets Nymex heating oil benchmark Ice gasoil Nymex WTI Ice Brent benchmark $/t Feb settlement settlement Mar Apr May Jun Jul Aug Sep Oct Dec Dec Dec Dec Dec Administration (EIA). At mn bl, inventories stand about 888,000 bl below where inventories stood the same week last year, and about 4.95pc above the five-year average. Demand for the fuel was mostly stable, dropping by 9,000 b/d to 1.622mn b/d. Imports of the fuel into the US rose last week, by 100,000 b/d to 197,000 b/d. At the US Atlantic coast, jet fuel inventories rose by 93,000 b/d to 115,000 b/d, while at the west coast, imports rose by 7,000 b/d to 82,000 b/d. Exports of jet fuel were down by 120,000 b/d to 87,000 b/d last week. Page 4 of 8

5 Argus Market Map W: M: W: M: W= Prior week M= Prior month Delta Outright W: M: Houston W: M: W: M: W: M: Rotterdam W: M: W: M: W: M: W: M: W: M: W: M: Singapore W: M: Geographic comparisons First center less second center Price spreads in Price spreads in $/t Prior week Prior month Prior three Prior six Prior week Prior month Prior three Prior six Rotterdam Singapore Los Angeles Singapore Singapore Mideast Gulf Rotterdam Mideast Gulf Mediterranean Mideast Gulf Rotterdam Mediterranean New York Rotterdam Rotterdam Houston New York Houston Los Angeles Houston Jet fuel inventories at the US Atlantic coast rose by 924,000 bl to mn bl, while production was down by 6,000 b/d to 110,000 b/d. At the US Gulf coast, inventories fell by 63,000 bl to mn bl and production fell by 77,000 b/d. Midcontinent jet fuel inventories rose by 815,000 bl to 6.99mn bl. Production in the same region rose by 20,000 b/d to 247,000 b/d. Jet fuel inventories at the US Rocky Mountain region fell by 21,000 bl to 712,000 bl and production was stable at 37,000 b/d. At the US west coast region, jet fuel inventories fell by 892,000 bl to mn bl. Production at the west coast was up by 16,000 b/d to 436,000 b/d. Page 5 of 8

6 Market commentary Asia-Pacific Singapore jet fuel swaps fell less than Dubai crude. Singapore jet prices this month were the highest since May There were no physical deals done during afternoon trading in Singapore. There were no bids or offers as well. Fob Singapore jet fuel premiums were assessed at $0.20/bl against Singapore spot assessments. Fob Singapore cargo prices reached $80/bl this month following the crude price trend and further supported by seasonal demand. The last time fob Singapore jet cargo price touched this level was in May 2015 for a very short period. The February-March time spread widened by $ /bl to $0.45/bl level compared with last month in backwardation indicating high prompt month swap values. Relatively high jet prices have triggered airlines to raise passenger fuel surcharges for flights originating to/from Japan and possibly Taiwan and South Korea. Japanese airlines' fuel surcharge is assessed bimonthly, based on a two-month average of Singapore jet-kerosine prices. Fob South Korea cash differentials stayed at more than $0.20/bl against Singapore spot assessments. February-loading cargoes from South Korea and Japan have been secured and Japanese refiners are preparing to look at the early March loading market. Japan during the week ending 27 January raised jet fuel production to 1.71mn bl from 1.13mn bl the previous week, latest data from the Petroleum Association of Japan showed. Kerosine production at 2.34mn bl was lower by 18.9pc from the previous week, following the unexpected shutdown of two crude distillation units (CDUs) last week. Idemitsu shut down the 160,000 b/d Aichi refinery on 22 January because of a boiler issue, but CDU operations resumed yesterday. JXTG Nippon Oil & Energy closed the 145,000 b/d Sendai refinery on 25 January. Kerosine stocks were lower by 10.8pc at 10.65mn bl compared with the previous week, despite high winter season demand. Jet fuel cash differentials for cargoes loading from the Mideast Gulf are assessed higher at a mid-$1/bl level. The arbitrage economics of loading cargoes from west coast India and the Mideast Gulf to Europe remain unviable on paper. Jet Europe Northwest European jet fuel cargo and barge premiums to Ice February gasoil rose sharply as a result of tightening regional supply. Vitol bought two 3,000t barges. The first was from Glencore fob ARA loading 5-9 February at a $46.50/t premium to Ice February gasoil. Shell sold the same size barge fob Amsterdam-Rotterdam-Ghent loading February at a $4/t discount to spot quotes. The barge premium rose by $5.50/t to reflect the value of the deal against Ice February gasoil. In the cargo market, there were five bids against a single offer, all against spot quotes or outside Argus' assessment period. Premiums to Ice February gasoil rose by $2.25/t to $48.25/t to reflect the move in swaps values. Supply is tightening in northwest Europe as a result of lower imports from the Mideast Gulf. And Kuwait s 440,000 b/d Mina al-ahmadi refinery is undergoing maintenance at its third CDU which could last around 30 days. In the Mediterranean, supply was said to be ample. There are around five cargoes on offer over the next month which Futures forward curve New York less Houston: 3-day moving avg 90 Nymex heating oil Nymex WTI Ice gasoil Ice Brent hh 50 Feb 18 Jan 20 Dec 21 Nov Oct Nov Dec Jan 18 Page 6 of 8

7 are currently unplaced, market participants said. Turkish refiner Tupras has issued a tender to buy 30,000t of jet fuel. The tender is for delivery 1-10 February cif Aliaga and is expected to close in a few days. An earlier tender issued by Algerian state-owned refiner Sonatrach was awarded to Spanish firm Cepsa, for 30,000t of jet fuel. The cargo will load in Skikda around 15 February and was bought at a $13/t premium to fob Med high assessments. Egyptian state-owned EGPC issued a rare tender earlier this month to sell 27,500t jet fuel fob el Dekheila loading at the end of February. The tender closed on Wednesday. New York less Rotterdam: 3-day moving avg hh Americas US jet fuel differentials mostly gained on Wednesday, despite the release of inventory data which showed a build in nationwide inventories. US jet fuel demand was mostly stable last week, dropping by 9,000 b/d to 1.622mn b/d. Jet fuel at the New York Harbor saw gains in differentials on Wednesday, despite the release of inventory data, which showed a 924,000 bl build in PADD I inventories last week. PADD I jet fuel inventories now stand at mn bl, about 925,000 bl below where stockpiles stood the same week last year. Buckeye pipeline jet fuel traded at March Nymex ULSD -4 / USG, while Colonial pipeline material continued to be talked at about a 0.25 discount to the Buckeye market. Jet fuel prices on the US Gulf coast rose by 0.43 to on Wednesday, halting the two-session decline that saw prices fall to a week-low on Tuesday. Differentials for jet fuel moved 0.5 higher from Tuesday, trading from March Nymex to -10 on scheduling day of the eighth cycle. US Gulf coast jet fuel rolls for cycles eight/nine traded at 0.3 and 0.20 backward, deepening the backwardation in the forward structure ahead of the cycle change. Chicago jet fuel cash differentials continued to decline Wednesday as offers for jet fuel originating at the Citgo East Chicago terminal fell to March Nymex +2 for first-cycle February shipping. Chicago jet cash differentials fell by 1 from Tuesday s market. Outright prices fell by 1.07, reflecting the slight fall in the March Nymex ULSD contract price. Group Three jet fuel cash differentials continued to hold steady as trade activity remains doggedly thin. The Energy Information Administration (EIA) weekly report showed that regional jet fuel stocks posted a fall of 900,000 bl to 10.4mn bl in the week ending 26 January, yet levels remained 7.2pc higher than a year ago Aug Sep Nov Jan New York jet fuel less heating oil 0 New York jet fuel: Differential range of trade 0 3 Aug 17 2 Oct Nov Jan Dec 17 8 Jan Jan Jan 18 Los Angeles February jet fuel traded between March Nymex -4.5 and -3.25, reversing Tuesday s losses. Cash prices gained 0.7 to close at $2.03/USG. hh Page 7 of 8

8 Argus Assessment Rationale Database For prices used in financial benchmarks, Argus publishes daily explanations of the assessment rationale with supporting data. This information is available to permissioned subscribers and other stakeholders. Subscribers to this report via Argus Direct or MyArgus may access the database here. Other subscribers may request access here or contact us by at Methodology Argus has been assessing daily global jet fuel prices since These prices appear in the Argus European Products, Argus Asia-Pacific Products, and Argus US Products reports. We have consolidated all our daily jet fuel prices, market commentary, and news into the Argus Jet Fuel report in order to better serve the airline and supplier community. The methodologies for all of the prices in this report are located at within the methodology document for the above named market report. On our website you will also find the Argus Global Compliance Policy and other useful reference material. Argus assesses global prices in petroleum, electricity, natural gas, coal, emissions and transportation markets. We use precise and transparent methodologies to assess prices, and many Argus assessments are used as a reference price by major market participants in spot deals, term contracts, swaps, transfer pricing and mark-to-market. The price data included in this report are available as a feed into your company s systems, supplied either directly from Argus or from several data aggregators that serve the industry. Argus offers various tools on its website for receiving this report and the price data included in it. Argus Jet Fuel is published by Argus Media group Registered office Lacon House, 84 Theobald s Road, London, WC1X 8NL Tel: sales@argusmedia.com ISSN: Copyright notice. All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus, and/or its licensors (including exchanges) and may only be used under licence from Argus. Without limiting the foregoing, by accessing this publication you agree that you will not copy or reproduce or use any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever except under valid licence from Argus. Further, your access to and use of data from exchanges may be subject to additional fees and/or execution of a separate agreement, whether directly with the exchanges or via Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, ARGUS JET FUEL, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited. Visit trademarks for more information. Disclaimer The data and other information published herein (the Data ) are provided on an as is basis. Argus and its licensors (including exchanges) make no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus and its licensors (including exchanges) shall not be liable for any loss, claims or damage arising from any party s reliance on the Data and disclaim any and all liability related to or arising out of use of the Data to the full extent permissible by law. Publisher Adrian Binks CEO Americas Euan Craik Chief operating officer Matthew Burkley Global compliance officer Jeffrey Amos Commercial manager Karen Johnson Managing editor Jim Kennett Editor: Zander Capozzola Tel: houstonproducts@argusmedia.com Customer support and sales: Technical queries technicalsupport@argusmedia.com All other queries support@argusmedia.com Houston, US Tel: New York. US Tel: Washington DC, US Tel: London, UK Tel: Astana, Kazakhstan Tel: Beijing Tel: Dubai Tel: Moscow, Russia Tel: Rio de Janeiro, Brazil Tel: Singapore Tel: Tokyo, Japan Tel: Petroleum illuminating the markets