Argus: US Gulf jet fuel output rises with demand
November 9, 2018
Jet fuel production on the US Gulf coast rose last week to a weekly November record as demand continued to climb.
Gulf coast jet output was up by 4pc to 932,000 b/d from the previous week and up by 9.3pc from year-ago data, according to the US Energy Information Administration (EIA). This followed an increase in export demand, which has jumped by 109pc year-over-year during the past four weeks to average 260,750 b/d, and hit a record high 377,000 b/d in the week ended 12 October.
Some of that jet fuel is likely headed to Mexico, where multiple clean product fixtures were seen booked this week from the US Gulf coast.
Brazil may demand more US jet fuel, as well, as a crude distillation unit at Petrobras’ 415,000 b/d Paulinia refinery (Replan) won’t restart until February 2019 following an explosion in August.
Export demand has strengthened despite the arbitrage from the Gulf coast to the Atlantic coast becoming the most profitable on paper since May, according to Argus assessments. The inter-regional spread has been the widest since mid-May the past two sessions at an average of 2.05¢/USG above the 5.49¢/USG tariff to ship on the Colonial pipeline. The arbitrage has been open on paper 10 of the past 11 trading days.
Domestic demand has also risen, as implied demand for jet fuel lifted last week by 4.3pc to 1.7mn b/d from the previous week. The uptick in demand pulled from inventories as Atlantic coast stocks reached a three-month low at 34.5mn bl.
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