USWC jet stocks at seven-year low, but region fails to attract many cargoes
Time：2014-05-23
Browse：132
West Coast jet stocks fell 418,000 barrels on the week to 7.32 million barrels during the week ended May 16, 10.8% lower than the same week last year and the lowest level since December 22, 2006, when it was 7.28 million barrels, data from the Energy Information Administration showed Wednesday. Production dipped 3,000 b/d to 397,000 b/d, 10.2% lower than a year earlier.
Total US stocks dropped 592,000 barrels to 38.88 million barrels, but remain roughly on par with the same week a year ago heading into the busy summer travel season. US production dipped 54,000 b/d to 1.48 million b/d but was 2.6% higher than a year earlier.
West Coast stocks, however, have been drawing down from 10.44 million barrels two months earlier due to refiner issues, including maintenance through June at Chevron`s El Segundo refinery that supplies 40% of fuel for neighboring Los Angeles International Airport.
In early May, Los Angeles jet fuel prices were the highest in the world, prompting traders to fix cargoes out of Asia, which had a glut of jet fuel. At least seven cargoes were fixed to load out of South Korea, sources said at the time. Vitol, Valero and Chevron were said among those fixing cargoes.
The differential for USWC jet peaked May 6 at NYMEX June ULSD futures plus 30 cents/gal, then fell 29.25 cents to plus 75 points/gal on May 13. It has regained value since, up 25 points Wednesday to plus 7 cents/gal, but sources said cargoes missed a prime window.
"The market collapsed and they just decided to go away," one West Coast trader said. "It doesn`t matter what we have in stock. There are ships all over the water that have stock -- four, five, six ships out there that could come here. There`s no stocks in tank but it`s almost like they have floating storage out there."
The BW Lara, a big long-range 1 vessel capable of carrying 500,000 barrels, is one of those ships that was said to have bypassed after reaching Los Angeles May 13.
"The BW Lara came and sat around for a while and left," the trader said. A shipping source agreed, although the two said the STI Texas City and Konstantin Jacob may have just unloaded part of their cargoes. EIA data showed no West Coast cargoes last week or the week before, although the two vessels likely missed the data count.
Sources and Platts cFlow vessel-tracking software showed Merkur 0 and Justice Victoria loading now in Asia, and the Orchid Express, STI Meraux and Bunga Begonia among likely jet cargoes already on the water, though none listed the USWC as a specific destination. Florida is a likely final destination after going through the Panama Canal.
"Ships are giving it a miss and going through the canal," the second source said. "Maybe I am missing something, but I don`t have a lot of ships heading this way."