Argus US Products
Issue 16-190 | Monday 3 October 2016
Market summary
Overview
„„ Crude prices rose today in choppy trade with Ice Brent
settling above $50/bl as last week's Opec agreement to limit
output continued to support prices. Nymex RBOB settled higher by 0.74¢/USG to $1.4705/USG and Nymex ultra-low sulfur
diesel (ULSD) increased by 1.49¢/USG to $1.5532/USG.
„„ Colonial pipeline distillate line space traded at its lowest
level on record as US Gulf coast ultra-low sulfur diesel (ULSD)
failed to find an arbitrage opportunity into New York Harbor.
„„ Rising crude prices did not prevent the US Gulf coast's 3-2-1
crack spread from weakening. The crack rose to $13.32/bl.
„„ Chicago-area 91 conventional gasoline traded at a value of
+65¢/USG early in the trading session on Monday, pushing up
cash differential values by more than 10¢/USG over Friday’s
assessment to 56.75¢/USG.
„„ An unidentified issue triggered heavy flaring late last week
at PBF Energy's 155,000 b/d refinery in Torrance, California.
Los Angeles and San Francisco gasoline cash differentials still
dipped lower in thin trade.
„„ New York Harbor CBOB commanded a premium over RBOB
on Monday as the market continued to move into the winter
season.
„„ US ethanol markets rebounded as CBOT corn futures soared
to an 11-week high alongside stronger RBOB futures.
Contents
Gasoline
Distillates
Biofuels and blending components
Feedstocks and residual fuel oil
Latest news
3
8
13
17
20
Price
¢/USG
New York
Houston
Chicago
Los Angeles
CBOB/suboctane
150.05
147.80
155.30
164.55
RBOB
149.75
147.80
160.43
167.55
87 conv
155.68
149.68
155.30
Ethanol
166.00
159.75
156.25
172.00
Jet fuel
145.40
144.02
163.32
151.82
ULSD
153.77
154.82
159.82
Bunker fuel $/t
265.50
247.50
Differential to Nymex
Licensed to: Cortney Becker, Argus Media Inc (New York)
¢/USG
New York
Houston
CBOB/suboctane
+3.00
+0.75
+8.25
+17.50
RBOB
+2.70
+0.75
+5.13*
+20.50
Chicago
Los Angeles
87 conv
+8.63
+2.63
+8.25
Jet fuel
-9.93
-11.30
+8.00
-3.50
ULSD
-1.55
-0.50
+4.50
+6.50
Bunker fuel $/t
-6.77
-9.62
-3.92
*Basis Chicago CBOB
Change on day
¢/USG
New York
Houston
Chicago
Los Angeles
CBOB/suboctane
+0.31
+1.12
+1.99
-2.01
RBOB
+0.21
+1.62
+1.99
-2.01
87 conv
+0.44
+1.12
+1.99
Ethanol
+3.00
+1.00
+1.00
+2.00
Jet fuel
+0.55
+1.44
+1.49
+0.49
+2.24
ULSD
+0.93
+2.99
Bunker fuel $/t
+4.50
-10.00
+2.11
+1.50
Forward curves
¢/USG
Swap
month
87 M
USGC†
ULSD 62 Nymex
USGC† month
Oct
147.30
152.32 Nov
147.05
155.32
Nov
142.18
151.08 Dec
144.68
156.38
Dec
138.26
150.51 Jan
144.51
157.76
Jan
140.11
152.88 Feb
145.86
158.88
Feb
143.29
154.17 Mar
148.04
159.42
Mar
149.40
154.73 Apr
165.90
159.23
*CME Nymex futures †swaps
Copyright © 2016 Argus Media group
161.82
283.50
RBOB
New York*
Heating oil
New York*
Argus US Products
Issue 16-190 | Monday 3 October 2016
Argus market map
¢/USG
Portland
NYH less Chicago
Portland less SF
RBOB
-2.00
ULSD
-7.50
CBOB
-5.25
ULSD
-6.05
Chicago
New York
Chicago less Group 3
San Francisco
SF less LA
RBOB
-3.50
ULSD
+1.50
CBOB
+6.38
ULSD
-1.25
Chicago less USGC
CBOB
+7.50
Colonial Line Space
ULSD
+5.00
Gasoline Line 01
-0.38
Distillates Line 02
-3.50
Tulsa
Los Angeles
Group 3 less USGC
LA less USGC
RBOB
+19.75
ULSD
+6.00
CBOB
+1.13
ULSD
+6.25
NYH less USGC
CBOB
+2.25
ULSD
-1.05
Houston
Latest news
page 20
Chicago 87 CNV vs Nymex
¢/USG
20
Infrastructure
„„ Phillips 66 begins Alliance maintenance
„„ Valero Port Arthur FCC malfunctions
„„ Pasadena Refining shuts FCC for repair
„„ Heavy weekend flaring at PBF Torrance
10
hh
hh
0
Industry
„„ Distillate line space trades at record low
„„ US auto sales up 4.5pc in September
„„ Canada announces federal carbon price
„„ California releases new LCFS scores
„„ Gunvor opens Houston office
87M Colonial cash
-10
5 Jul
160
30
150
20
hh
140
3 Oct
¢/USG
hh
hh
10
130
5 Jul
1 Sep
Chicago jet fuel vs Nymex
¢/USG
hh
3 Aug
0
3 Aug
1 Sep
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
3 Oct
5 Jul
Page 2 of 25
3 Aug
1 Sep
3 Oct
Argus US Products
Issue 16-190 | Monday 3 October 2016
Gasoline
Atlantic coast
Atlantic coast
New York Harbor CBOB commanded a premium over RBOB
on Monday as the market continued to move into the winter
season.
Buckeye and barge CBOB were valued from November
Nymex RBOB +2.75¢/USG to +3.25¢/USG with a trade at the
beginning of the prompt window on the high end of the range
and the latter part of the prompt window discussed slightly
lower. Prompt CBOB was also talked from an overall perspective at close to 0.3¢/USG higher than prompt RBOB with RBOB
dealt from November Nymex +2.4¢/USG to +3¢/USG for prompt
timing.
Dead prompt RBOB was considered higher than prompt
RBOB based on verified trades, while the structure of the
forward curve was backward with any October RBOB discussed
from November Nymex +1¢/USG to +1.25¢/USG.
Premium RBOB was offered at November Nymex +15.75¢/
USG, while the value for premium RBOB and premium CBOB
was talked slightly lower at November Nymex +15.5¢/USG.
Colonial offline M2 was initially offered at November Nymex +9.25¢/USG and was later discussed at bid and offer levels
of November Nymex +8¢/USG and +9.25¢/USG.
Colonial offline A3 was talked from November Nymex
+4.75¢/USG to +5.25¢/USG, while the offline A2 market was
extremely quiet with a lack of bids and offers.
Gulf coast
US Gulf coast gasoline cash differentials mostly firmed on Monday as the region rolled to a newly prompt Colonial pipeline
cycle 56.
Cash prices in the region firmed by as much as 2.49¢/USG
despite a daily loss of 1.69¢/USG on the underlying November
RBOB Nymex basis.
The 11.5 regular CBOB (A3) traded 0.375¢/USG higher on
the day, and was valued at parity with the 13.5 RVP regular
RBOB (F4) as both grades saw deals done from November RBOB
Nymex +0.5¢/USG to 1¢/USG during the session.
The 11.5 RVP premium CBOB (D3) was an exception to the
day’s rally as the CBOB octane premium narrowed and the
cash differential fell by 5.125¢/USG.
Arbitrage between the Gulf coast and New York Harbor
fell as much as 1.405¢/USG. Gasoline line space remained
unchanged from the previous session. Offers were seen as low
as flat to the November RBOB Nymex basis, but no deals were
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
¢/USG
Basis
Differential
Price
±
87 conv inc duty 9
Nov
+8.00/+9.25
155.05-156.30
+0.44
87 conv ex duty 9
Nov
-3.14/-1.89
143.91-145.16
+0.25
Reg RBOB inc duty 13.5
Nov
+4.90/+5.50
151.95-152.55
+0.21
Reg RBOB ex duty 13.5
Nov
-6.24/-5.64
140.81-141.41
+0.03
157.89-159.14
+0.47
Prem RBOB inc duty 13.5
Nov
+17.70/+18.30
164.75-165.35
+0.68
93 conv inc duty 9
Nov
+16.13/+17.38
163.18-164.43
+0.56
Nov
+5.08/+5.33
152.13-152.38
+0.21
Nov
+8.00/+9.25
155.05-156.30
+0.44
157.94-159.10
+0.48
+0.56
New York waterborne
89 conv inc duty 9
Boston waterborne
Reg RBOB 13.5
Colonial Linden
87 conv M Cycle 49 9
89 conv Cycle 48 9
93 conv V Cycle 48 9
Nov
+16.25/+17.25
163.30-164.30
Reg CBOB Cycle 49 9
Nov
+7.00/+8.00
154.05-155.05
Reg CBOB dead prompt 12.9
Nov
+2.75/+3.25
149.80-150.30
-0.19
Reg CBOB prompt 12.9
Nov
+2.75/+3.25
149.80-150.30
+0.31
Reg RBOB dead prompt 13.5
Nov
+2.75/+3.25
149.80-150.30
-0.19
Reg RBOB prompt 13.5
Nov
+2.40/+3.00
149.45-150.05
+0.21
Prem CBOB dead prompt 12.9 Nov
+15.25/+15.75
162.30-162.80
+0.56
Prem CBOB prompt 12.9
Nov
+15.25/+15.75
162.30-162.80
+0.56
Prem RBOB dead prompt 13.5 Nov
+15.25/+15.75
162.30-162.80
+0.69
Prem RBOB prompt 13.5
Nov
+15.25/+15.75
162.30-162.80
+0.69
Reg CBOB dead prompt 12.9
Nov
+2.75/+3.25
149.80-150.30
-0.19
Reg CBOB prompt 12.9
Nov
+2.75/+3.25
149.80-150.30
+0.31
Reg RBOB dead prompt 13.5
Nov
+2.75/+3.25
149.80-150.30
-0.19
Reg RBOB prompt 13.5
Nov
+2.40/+3.00
149.45-150.05
+0.21
New York barge
Buckeye
Prem CBOB dead prompt 12.9 Nov
+15.25/+15.75
162.30-162.80
+0.56
Prem CBOB prompt 12.9
Nov
+15.25/+15.75
162.30-162.80
+0.56
Prem RBOB dead prompt 13.5 Nov
+15.25/+15.75
162.30-162.80
+0.69
Prem RBOB prompt 13.5
+15.25/+15.75
162.30-162.80
+0.69
Nov
Laurel
Reg CBOB 12.9
Nov
+6.10/+6.60
153.15-153.65
+1.16
Prem CBOB 12.9
Nov
+15.25/+15.75
162.30-162.80
+0.56
CME Nymex RBOB
Price
Month
Crack spread
¢/USG
±
Nov
147.05
Dec
144.68
Jan
144.51
Page 3 of 25
Month
$/bl
+0.74
Nov
+12.95
+1.22
Dec
+11.37
+1.42
Jan
+10.68
Argus US Products
Issue 16-190 | Monday 3 October 2016
Gasoline
reached.
The 3-2-1 LLS crack spread in the US Gulf coast posted a
slight gain, increasing by 0.161¢/USG, to 13.324¢/USG from the
previous session.
Gulf coast
¢/USG
Basis
Differential
Price
±
+1.12
Waterborne
Reg CBOB A 11.5
Nov
+1.75/+2.25
148.80-149.30
87 conv M 11.5
Nov
+3.25/+4.50
150.30-151.55
+1.12
155.11-156.36
+1.38
89 conv 11.5
Midcontinent
Premium gasoline cash differentials in the Chicago area shot
up on the heels of new trading activity, coinciding with a seasonal transition in demand.
Chicago-area 91 conventional gasoline traded at a value of
+65¢/USG early in the trading session on Monday, pushing up
cash differential values by more than 10¢/USG over Friday’s
assessment to 56.75¢/USG.
Trade for all gasoline grades intensified as the NYMEX RBOB
contract basis switched from October to November, prompting a reorientation of interest toward winter season demand.
The November RBOB gained 0.74¢/USG over Friday’s value
on Monday, but still undercut the last settled October RBOB
contract price.
Cash differentials for Chicago-area generic CBOB firmed by
1.25¢/USG on Monday over Friday’s market, reaching November Nymex +8.25¢/USG.
Chicago-area RBOB held steady, with values indicated at
parity with Friday’s assessment, but the grade’s discount to
premium RBOB widened, pushing the latter up to RBOB +50¢/
USG.
Even as Group Three sub-octane V-grade CBOB saw a
healthy pickup in trade, the values at which it traded ultimately kept cash differentials in line with Friday’s market when
looking only at a November Nymex basis. Outright prices for
the grade strengthened ever so slightly to $1.49/USG.
Octane premiums for Group Three 91 conventional A-grade
gasoline remained unchanged.
Prem CBOB 11.5
Nov
+15.25/+16.75
162.30-163.80
-4.38
93 conv V 11.5
Nov
+17.00/+18.25
164.05-165.30
+1.87
Waterborne export
Reg CBOB A 11.5
Nov
-7.78/-7.28
139.27-139.77
+0.94
87 conv M 11.5
Nov
-6.28/-5.03
140.77-142.02
+0.94
145.58-146.83
+1.20
Prem CBOB 11.5
Nov
+5.72/+7.22
152.77-154.27
-4.57
93 conv V 11.5
Nov
+7.47/+8.72
154.52-155.77
+1.69
Nov
+2.00/+3.25
149.05-150.30
+1.12
+3.09
150.14
89 conv 11.5
Colonial
87 conv M 11.5 Cycle 56
Weighted average
87 conv M 11.5 Cycle 57
Nov
+1.50/+2.75
148.55-149.80
+1.37
Reg RBOB F 13.5 Cycle 56
Nov
+0.50/+1.00
147.55-148.05
+1.62
+0.83
147.88
Weighted average
Reg RBOB F 13.5 Cycle 57
Nov
+0.15/+0.50
147.20-147.55
+1.82
Reg CBOB A 11.5 Cycle 56
Nov
+0.50/+1.00
147.55-148.05
+1.12
+0.72
147.77
0.00/+0.25
147.05-147.30
+1.62
153.86-155.11
+1.38
Weighted average
Reg CBOB A 11.5 Cycle 57
Nov
89 conv 11.5
Prem CBOB D 11.5 Cycle 56
Nov
+14.00/+15.50
161.05-162.55
+0.24
93 conv V 11.5 Cycle 56
Nov
+15.75/+17.00
162.80-164.05
+2.62
93 conv V 11.5 Cycle 57
Nov
+15.25/+16.50
162.30-163.55
na
Prem RBOB 13.5 Cycle 56
Nov
+11.50/+12.00
158.55-159.05
+2.74
Prem RBOB 13.5 Cycle 57
Nov
+11.15/+11.50
158.20-158.55
na
-0.50/-0.25
0.00
Colonial Line Space
Gasoline Line 01 Cycle 56
Weighted average
-0.38
see distillates section for Colonial Line 02 assessment
weighted average is volume-weighted average of deals done during the entire trading day
Chicago ULSD vs Nymex
¢/USG
10
5
0
hh
hh
-5
-10
5 Jul
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Page 4 of 25
3 Aug
1 Sep
3 Oct
Argus US Products
Issue 16-190 | Monday 3 October 2016
Gasoline
Midcontinent
West coast
Los Angeles and San Francisco gasoline cash differentials
dipped in thin trade on Monday, while Portland gasoline
shifted higher.
Los Angeles CARBOB traded between November Nymex
+20¢/USG and +21¢/USG. Cash differentials fell 2.75¢/USG and
cash prices fell 2¢/USG. Further forward, November volumes
were talked between December Nymex +5¢/USG and +10¢/
USG. Cash differentials fell 4¢/USG.
The backwardation in the forward curve widened slightly.
An unidentified issue triggered heavy flaring late last week
at PBF Energy's 155,000 b/d refinery in Torrance, California.
The refiner reported at least 30 minutes of increased flaring on 1 October in a 9:21pm ET filing to a community alert
system. PBF declined to comment on the status of operations
on MOnday.
Flaring has persisted at Torrance since a 17 September
power outage and mechanical failure, which has boosted gasoline prices in southern California.
Los Angeles gasoline now sits at a 4¢/USG premium over
San Francisco. San Francisco had commanded a strong premium over Los Angeles in recent weeks, before the issues at
Torrance caused southern Californian prices to spike.
The San Francisco market similarly fell today but no deals
were struck. Volumes were talked between November Nymex
+14¢/USG and +20¢/USG. Cash differentials slid 4¢/USG lower.
Cash prices fell 3.3¢/USG.
Portland suboctane gasoline exchanged hands twice at
November Nymex +15¢/USG. Cash differentials inched 0.5¢/
USG higher.
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
¢/USG
Basis
Differential
Price
±
Nov
+1.25/+2.50
148.30-149.55
+0.24
+1.56
148.61
Group 3
Suboctane V 11.5 prompt
Weighted average
Suboctane V 11.5 any Oct
Nov
91 conv A 11.5 prompt
Suboct V
+0.50/+1.75
147.55-148.80
-0.51
+22.00/+24.00
170.93-172.93
+0.24
Chicago
Reg CBOB 11.5 1st Oct
Nov
+7.00/+9.50
154.05-156.55
+1.99
Reg CBOB 13.5 2nd Oct
Nov
+4.25/+7.75
151.30-154.80
+0.99
Reg CBOB BCX 13.5 Cycle
Nov
+6.75/+9.25
153.80-156.30
+1.99
87 conv 11.5 1st Oct
Nov
+7.00/+9.50
154.05-156.55
+1.99
87 conv 13.5 2nd Oct
Nov
+4.25/+7.75
151.30-154.80
+0.99
89 conv 11.5
91 conv 11.5 1st Oct
87
+56.50/+57.00
174.26-176.06
+5.57
211.80-212.30
+12.24
+11.24
91 conv 13.5 2nd Oct
87
+56.00/+57.50
209.05-210.55
Reg RBOB 11.5 1st Oct
CBOB
+4.75/+5.50
160.05-160.80
+1.99
Reg RBOB 13.5 2nd Oct
CBOB
+4.75/+5.50
157.80-158.55
+0.99
Prem RBOB 11.5 1st Oct
RBOB
+45.00/+55.00
205.43-215.43
+13.87
West coast
¢/USG
Basis
Differential
Price
±
+20.00/+21.00 167.05-168.05
-2.01
Los Angeles
Reg CARBOB 10.5 Oct
Nov
Weighted average
+20.33
167.38
Reg CARBOB 10.5 Nov
Dec
Prem CARBOB 5.99 Oct
CARBOB
+30.00/+31.50
+5.00/+10.00 149.68-154.68
197.55-199.05
-2.01
-2.78
Suboctane 10.0 Oct
Nov
+17.00/+18.00 164.05-165.05
-2.01
Reg AZRBOB 8.0 Oct
CARBOB
+2.00/+4.00
169.55-171.55
-2.01
Prem AZRBOB 8.0 Oct
CARBOB
+32.75/+34.75
200.30-
-2.01
Reg CARBOB 5.99 Oct
Nov
+14.00/+20.00
161.05-167.05
-3.26
Prem CARBOB 5.99 Oct
CARBOB
+25.00/+27.00 189.05-191.05
-3.26
Nov
+14.50/+15.50
+1.24
San Francisco
Portland
Suboctane 13.5 Oct
Page 5 of 25
161.55-162.55
Argus US Products
Issue 16-190 | Monday 3 October 2016
Gasoline
Gulf coast deals
Assessment rationale
The US Atlantic coast prompt barge RBOB assessment was
based on market discussion and on verified Buckeye trades
as Buckeye and barge RBOB were considered at parity. The
low and high prices were set at the November Nymex RBOB
contract +2.4¢/USG and +3¢/USG, respectively.
The US Gulf coast regular CBOB A 11.5 RVP market met the
volume minimums needed to set the low and high price
according to the methodology. The low and high prices for
regular CBOB A 11.5 RVP were set at the October Nymex RBOB
contract +0.5¢/USG to +1¢/USG, even with the low and high
trades for regular CBOB A 11.5 RVP grade.
Trades for the US Gulf coast regular RBOB F market at October
RBOB Nymex +0.5¢/USG and +1¢/USG were used to set the low
and high price for the day's assessment.
The US Gulf coast 87 conventional M 11.5 RVP market met
the volume minimums needed to set the low and high price
according to the methodology. The low and high prices for 87
conventional M 11.5 RVP were set at the October Nymex RBOB
contract +2¢/USG to +3.25¢/USG, even with the low and high
trades for 87 conventional M 11.5 RVP grade.
A polling of market participants placed value for generic Chicago area regular CBOB between the November Nymex RBOB
contract 7¢/USG and 9.5¢/USG, even with the low and high
trades for regular CBOB.
Colonial Cbob A cash vs Nymex
Grade
Timing
Colonial A3
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
56th
Colonial M3
Colonial F4
¢/USG
Colonial D3
Colonial D4
Colonial V3
5
0
-5
hh
hh
-10
-15
5 Jul
3 Aug
1 Sep
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
3 Oct
Page 6 of 25
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Cycle
Price
Volume
+0.50
+0.50
+0.75
+0.75
+0.75
+0.75
+1.00
+1.00
A4+1.00
A4+1.25
C57+0.50
C57+0.75
+2.00
+2.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
+3.25
C57+0.50
+0.50
+1.00
+1.00
C57+0.35
C57+0.35
C57+0.35
C57+0.50
D4+1.00
+13.00
V4+1.00
25
50
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
25
50
50
25
25
25
25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Gasoline
Colonial 87M vs Group Three 84V
Atlantic coast deals
¢/USG
10
Grade
Timing
Price
F4
403i
404i
412i
6 Oct
10 Oct
10 Oct
10 Oct
15 Oct
10 Oct
10 Oct
c50
283e
282L
Nov+3.25
Nov+2.75
Nov+2.40
Nov+3.00
Nov+2.40
Nov+2.35
Nov+2.50
Nov+2.00
20 Oct+0.75
20 Oct+0.90
Nov+7.50
Nov+3.25
Nov+6.35
5
0
hh
hh
-5
M3
Reg CBOB 12.9
Volume
25
25
25
25
50
50
50
50
25
25
25
25
50
bpl
bpl
bpl
bpl
generic
generic
generic
generic
roll
roll
cpl
bpl
lpl
-10
5 Jul
3 Aug
1 Sep
Colonial Cbob A vs ethanol
3 Oct
Midcontinent deals
Grade
Timing
MPL sub-octane V
Prompt
Nov+2.50
10
Prompt
Nov+1.75
10
Prompt
Nov+1.50
15
Prompt
Nov+1.25
25
Prompt
Nov+1.25
25
3 Oct
Nov+2.25
5
5 Oct
Nov+1.75
10
20 Oct
Nov+2.00
25
C1 Oct
Nov+8.00
15
C1 Oct
Nov+6.75
50
Prompt
Nov+9.25
16
C1 Oct
Nov+9.25
25
5 Oct
Nov+9.00
25
5 Oct
Nov+7.00
15
¢/USG
10
0
Wolverine CBOB
-10
hh
Buckeye Complex CBOB
hh
-20
-30
Price Volume
Wolverine 91 conv
C1 Oct
Nov+65.00
10
Buckeye Complex 91
5 Oct
Nov+65.00
10
-40
5 Jul
3 Aug
1 Sep
3 Oct
West coast deals
Grade
Timing
LA 84 Carbob
Oct
Nov+20.00
25
Oct
Nov+20.00
25
Oct
Nov+21.00
25
Oct
Nov+15.00
10
Oct
Nov+15.00
10
Portland 84 Conv
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Page 7 of 25
Price
Volume
Argus US Products
Issue 16-190 | Monday 3 October 2016
Distillates
Atlantic coast
Atlantic coast
US Atlantic coast ultra-low sulfur diesel (ULSD) differentials
softened on Monday.
Prompt barge ULSD material traded at November Nymex
ULSD -1.55¢/USG about 0.5¢/USG weaker than where values
stood on Friday.
Buckeye pipeline ULSD material also softened, following
the barge market lower, as the two delivery methods continue
to be talked at parity to one another. Laurel pipeline was
range-bound to where values were talked on Friday. Cycle 281L
ULSD material changed hands at November Nymex ULSD 1.25¢/
USG.
A stronger Nymex futures contract resulted in higher cash
prices on Monday despite declines seen in the differentials.
Jet fuel differentials at the US Atlantic coast softened on
Monday. Buckeye pipeline jet fuel material shed close to 1¢/
USG, with volume trading at November Nymex ULSD -10¢/USG
and -9.85¢/USG. Offline Colonial pipeline jet fuel traded at
November Nymex ULSD -10¢/USG, also about 1¢/USG weaker
session-on-session.
The jet fuel forward curve was talked in a contango on
Monday after seeing a flat structure in recent weeks.
Ultra-low sulfur heating oil (ULSH) markets were mostly
quiet on Monday, with barge and Buckeye pipeline material talked between November Nymex ULSD -6.75¢/USG and
-6.25¢/USG.
ULSH offline Colonial pipeline cycle 51 material traded at
November Nymex ULSD -6.5¢/USG.
High sulfur heating oil material emerged on Monday but
differentials were stable for the barge market. Offline Colonial
pipeline material was talked stronger, at November Nymex
ULSD -11.75¢/USG.
The 500ppm heating oil market gained about 1¢/USG on
Monday, with offline Colonial pipeline material trading at November Nymex ULSD -8.5¢/USG.
Amid the nearing winter demand season, 2,000ppm and
500ppm heating oil market start to see a contango forward
curve structure.
CME Nymex ultra low-sulfur diesel
Price
Month
Crack spread
±
¢/USG
Month
$/bl
Nov
155.32
+1.49
Nov
+16.42
Dec
156.38
+1.55
Dec
+16.28
Jan
157.76
Jan
+16.25
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
¢/USG
Basis
New York waterborne
Heating oil
ULSD
Jet
Kerosine
ULSK
Boston waterborne
HO 500ppm
New York barge
Heating oil prompt
Heating oil any Oct
ULSHO
HO 500ppm
ULSD prompt
ULSD any Oct
Jet
Kerosine
ULSK
Buckeye
ULSHO
HO 500ppm
ULSD
Jet
Kerosine
Laurel
HO 500ppm
ULSD
Jet
Colonial Linden
ULSHO Cycle 50
HO 500ppm Cycle 50
HO 77 Cycle 50
ULSD Cycle 50
Jet 54 Cycle 51
Differential
Price
±
Nov
Nov
Nov
Nov
Nov
-11.75/-11.25
-1.80/-1.30
-10.18/-9.68
+4.75/+5.25
+24.00/+26.00
143.57-144.07
153.52-154.02
145.15-145.65
160.07-160.57
179.32-181.32
+2.48
+0.93
+0.56
+1.48
+4.53
Nov
-7.38/-7.13
147.95-148.20
+2.48
Nov
Nov
Nov
Nov
Nov
Nov
Nov
Nov
Nov
-11.75/-11.25
-10.75/-10.25
-6.75/-6.25
-9.00/-8.50
-1.80/-1.30
-1.40/-0.90
-10.00/-9.85
+4.50/+5.50
+24.00/+26.00
143.57-144.07
144.57-145.07
148.57-149.07
146.32-146.82
153.52-154.02
153.92-154.42
145.32-145.47
159.82-160.82
179.32-181.32
+2.48
+0.55
+1.48
+4.53
Nov
Nov
Nov
Nov
Nov
-6.75/-6.25
-9.00/-8.50
-1.80/-1.30
-10.00/-9.85
+4.50/+5.50
148.57-149.07
146.32-146.82
153.52-154.02
145.32-145.47
159.82-160.82
+2.23
+0.73
+0.93
+0.55
+1.48
Nov
Nov
Nov
-9.00/-8.50
-1.50/-1.00
-10.00/-9.85
146.32-146.82
153.82-154.32
145.32-145.47
+0.73
+1.85
+0.55
Nov
Nov
Nov
Nov
Nov
-6.75/-6.25
-9.00/-8.50
-12.00/-11.50
-0.25/+0.15
-10.25/-9.75
148.57-149.07
146.32-146.82
143.32-143.82
155.07-155.47
145.07-145.57
+0.99
+0.49
+2.49
+1.74
+0.49
Differential
Price
±
Nov
Nov
Nov
Nov
-14.25/-13.75
-0.75/+2.25
-10.10/-10.00
-9.60/-9.50
141.07-141.57
154.57-157.57
145.22-145.32
145.72-145.82
+1.99
+2.99
+1.44
+1.44
Nov
Nov
Oct
Oct
-14.25/-13.75
-10.28/-7.28
-10.00/-9.50
-9.00/-8.50
141.07-141.57
145.04-148.04
132.90-133.40
133.90-134.40
+1.99
+2.81
+2.28
+2.28
Nov
Nov
-10.00/-7.25
-15.50/-15.00
-15.09
-15.75/-15.25
-2.00/+1.00
-0.48
-2.00/-0.35
-11.35/-11.25
-11.30
-11.35/-11.25
-10.85/-10.75
-10.85/-10.75
145.32-148.07
139.82-140.32
140.23
139.57-140.07
153.32-156.32
154.84
153.32-154.97
143.97-144.07
144.02
143.97-144.07
144.47-144.57
144.47-144.57
+2.99
+1.99
Gulf coast
¢/USG
Basis
Waterborne
Heating oil
ULSD 62
Jet 54
Kerosine 55
Waterborne export
Heating oil
ULSD 62
Jet 54
Kerosine 55
Colonial
ULSHO 67 Cycle 54
Heating oil 77 Cycle 54
Weighted average
Heating oil 77 Cycle 55
ULSD 62 Cycle 54
Weighted average
ULSD 62 Cycle 55
Jet 54 Cycle 55
Weighted average
Jet 54 Cycle 56
Kerosine 55 Cycle 55
Kerosine 55 Cycle 56
Colonial Line Space
Distillates Line 02 Cycle 54
+2.23
+0.73
+0.93
Nov
Nov
Nov
Nov
Nov
Nov
Nov
-4.00/-3.00
+1.99
+2.99
+2.81
+1.44
+1.44
+1.44
-0.75
see gasoline section for Colonial Line 01 assessment; weighted average is volumeweighted average of deals done during the entire trading day
Page 8 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Distillates
Midcontinent
Gulf coast
Colonial pipeline distillate line space traded at its lowest level
on record Monday as US Gulf coast ultra-low sulfur diesel
(ULSD) remained closely valued with material on the US Atlantic coast.
Prices bottomed out last week at their lowest levels on
record as discussions for prompt space fell to either side of
-4¢/USG, although ultimately no trades were detected at
those levels. Today was the first time that distillate line space
traded below -2.5¢/USG since the assessment first started on
26 September, 2014.
Gulf coast distillate cash prices rose on the back of a
2.53¢/USG gain in the underlying November Nymex ULSD basis,
though regional differentials were directionally mixed in daily
comparison, with weaker values for high-sulfur heating oil and
jet fuel limiting overall gains.
Prices for 62 grade ULSD bifurcated from other distillate
products and traded up 0.46¢/USG on the day amid scheduling
for the prompt cycle. Trades for prompt material were done
anywhere from November Nymex ULSD -2¢/USG, up to +1¢/
USG.
Gulf coast jet fuel differentials declined Monday, shedding
1.09¢/USG from level seen on Friday. Overall liquidity was poor
as the market shifted to a newly prompt cycle 55, with little
heard before midday. Trades for the prompt cycle were done
at November Nymex ULSD -11.35¢/USG and -11.25¢/USG.
Trades for cycle 54 high-sulfur heating oil were done between November Nymex ULSD -15.5¢/USG and -15¢/USG, down
about 0.7¢/USG from the previous session.
Midcontinent
Regional cash differentials and outright prices for ultra-low
sulphur diesel (ULSD) firmed in the US Midcontinent.
Group Three X grade ULSD began the trading session
on Monday at November Nymex +5.25¢/USG, incrementally
working its way up to a trade value of +6¢/USG. That placed
Monday’s market value 0.9¢/USG above Friday’s assessment.
Outright prices for Group X firmed accordingly by more
than 0.2¢/USG.
The Group Three ULSD markets is also show signs of increasingly severe backwardation with forward prices assessed
at 0.75¢/USG below the prompt price.
Chicago-area ULSD cash differentials increased by 0.75¢/
USG on Monday as values were discussed around November
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
¢/USG
Basis
Differential
Price
±
Nov
+5.50/+6.00
160.82-161.32
+2.61
+5.77
161.09
Group 3
ULSD X prompt
Weighted average
ULSD X any Oct
Nov
+4.75/+5.25
160.07-160.57
Jet Q prompt
Nov
-12.00/-10.00
143.32-145.32
ULSD 1st Oct
Nov
+4.25/+4.75
159.57-160.07
+2.24
ULSD 2nd Oct
Nov
+3.75/+4.00
159.07-159.32
+2.24
+2.24
+2.53
Chicago
ULSD BCX Cycle 28
Nov
+4.75/+5.25
160.07-160.57
Jet 1st Oct
Nov
+6.00/+10.00
161.32-165.32
+1.49
Jet 2nd Oct
Nov
+6.00/+10.00
161.32-165.32
+1.49
West coast
¢/USG
Basis
Differential
Price
±
Nov
+6.00/+7.00
161.32-162.32
+2.11
+6.50
161.82
Los Angeles
Carb ULSD Oct
Weighted average
EPA ULSD Oct
Nov
+5.00/+6.00
160.32-161.32
+2.11
Jet Oct
Nov
-4.00/-3.00
151.32-152.32
+0.49
-3.50
151.82
Weighted average
San Francisco
Carb ULSD Oct
Nov
+7.50/+8.50
162.82-163.82
+3.99
EPA ULSD Oct
Nov
+6.50/+7.50
161.82-162.82
+3.99
Jet Oct
Nov
-6.00/-5.00
149.32-150.32
+0.49
Nov
-2.00/+1.00
153.32-156.32
+3.49
Portland
ULSD Oct
Nymex +4.5¢/USG for generic grades and around +5¢/USG for
ULSD originating in the Buckeye Complex, which still enjoys a
0.5¢/USG premium to the generic grade.
Jet fuel prices remained unchanged amid a lack of trade.
West coast
Jet fuel cash differentials on the US west coast fell today while
diesel cash differentials rose.
In the Los Angeles prompt jet fuel market, two deals
were struck at November Nymex -3.5¢/USG. Cash differentials
fell 1¢/USG from Friday while cash prices nudged 0.5¢/USG
higher. Volumes for the second half of the month traded at
Nymex -4¢/USG. Further forward, November volumes traded
at December Nymex -5¢/USG. Last week the fact that there
were few prompt cargoes available boosted jet fuel prices.
But this week market participants are eyeing a few jet fuel
vessels that are making their way to Los Angeles. The Swarna
Page 9 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Distillates
Mala and St Joseph are both expected to arrive in Los Angeles
over the next week, coming from Japan. The Nave Equator is
expected to arrive in San Francisco, from Yeosu, South Korea.
Los Angeles prompt CARB diesel traded at November Nymex +6.5¢/USG. Cash differentials rose 0.65¢/USG while cash
prices rose 2¢/USG. November volumes traded at a 4¢/USG
premium to the underlying basis.
San Francisco CARB diesel traded hands at October Nymex
+8¢/USG. Cash differentials rose 2.5¢/USG while cash prices
rose 4¢/USG.
Portland diesel was offered at a penny premium to the
underlying basis, but there no bids heard in the market. Cash
differentials climbed 2¢/USG higher.
Gulf coast deals
Grade
Timing
Colonial 77
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
54th Cycle
55th Cycle
55th Cycle
55th Cycle
54th Cycle
Colonial 62
Assessment rationale
The US Atlantic coast 62 grade Colonial pipeline market did
not trade. The market was assessed between November Nymex ULSD -0.25¢/USG and +0.15¢/USG, using a bid and offer to
set the high and low value in absence of trade.
The US Atlantic coast ULSD Buckeye pipeline market did
not trade. In absence of liquidity, the market was assessed
between November Nymex ULSD -1.8¢/USG and -1.3¢/USG,
at parity with where the barge market traded, where the
relationship between the two delivery methods were last
discussed.
The US Atlantic coast ULSD barge market met volume minimums to set the midpoint according to methodology. The
market was assessed between November Nymex ULSD -1.8¢/
USG and -1.3¢/USG.
The US Gulf coast ULSD market met the volume minimums
needed to set the low and high prices according to the methodology. The low and high prices for ULSD were set at the
November Nymex ULSD contract -2¢/USG and +1¢/USG.
The US Gulf coast heating oil market met the volume minimums needed to set the low and high prices according to the
methodology. The low and high prices for heating oil were set
at the November Nymex ULSD contract -15.5¢/USG and -15¢/
USG.
The US Atlantic coast 67 grade Colonial pipeline market did not
trade. The market was assessed between November Nymex
ULSD -6.75¢/USG and -6.25¢/USG, based on market participant
discussions.
The US Atlantic coast jet fuel Buckeye pipeline market met
volume minimums to set the midpoint according to methodolo-
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Colonial 54
Colonial line space 02
Price
Volume
-15.50
-15.25
-15.00
-15.00
-2.00
-1.75
-1.75
-1.75
-1.75
-1.75
-1.75
-1.75
-1.50
-1.50
-1.00
0.00
0.00
+0.75
+1.00
+1.00
+1.00
+1.00
+1.00
+1.00
+1.00
C55 0.00
C55+1.00
C55+1.25
C55+1.35
-1.00
-11.35
-11.25
-3.50
25
25
25
125
25
25
25
25
25
25
25
25
25
25
25
25
50
25
25
25
25
25
25
25
25
25
25
25
25
25
50
50
25
gy. The market was assessed between November Nymex ULSD
-10¢/USG and -9.85¢/USG.
The US Atlantic coast jet fuel 54 grade Colonial pipeline
market met volume minimums to set the midpoint according
to methodology. The market was assessed between November
Nymex ULSD -10.25¢/USG and -9.75¢/USG.
The US Atlantic coast jet fuel barge market did not trade. In
absence of liquidity, the market was assessed between November Nymex ULSD -10¢/USG and -9.85¢/USG, at parity with the
Buckeye pipeline, where the relationship between the two
delivery methods were last discussed.
The US Gulf coast jet market met the volume minimums
needed to set the low and high prices according to the methodology. The low and high prices for jet fuel were set at the
November Nymex ULSD contract -11.35¢/USG and -11.25¢/USG.
Page 10 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Distillates
NYH ULSD barge vs Nymex
Atlantic coast deals
¢/USG
1
0
Grade
Timing
Heat 2000ppm
6 Oct
Heat 500ppm
C51
Nov-8.50
10 CPL
C51
Nov-8.50
50 CPL
C51
Nov-6.50
25 CPL
7 Oct
Nov-1.55
25 Barge
281L
Nov-1.25
25 LPL
281L
Nov-1.25
25 LPL
6-8 Oct
Nov-10.00
25 BPL
07 Oct
Nov-10.00
25 BPL
07 Oct
Nov-10.00
25 BPL
8-10 Oct
Nov-10.00
25 BPL
7-9 Oct
Nov-9.85
25 BPL
ULSD
-1
hh
hh
-2
Jet
-3
-4
5 Jul
3 Aug
1 Sep
ULSD: NYH Buckeye vs USGC Colonial
3 Oct
2
MPL ULSD X
1.5
1
hh
0.5
0
22 Jul
22 Aug
25 Barge
C49
Nov-10.50
10 CPL
C50
Nov-10.00
25 CPL
C51
Nov-10.00
25 CPL
Timing
Price
Volume
Prompt
Nov +6.00
10
Prompt
Nov +6.00
10
Prompt
Nov +6.00
10
Prompt
Nov +5.75
10
3 Oct
Nov +5.50
25
5 Oct
Nov +6.00
25
10 Oct
Nov +6.00
25
10 Oct
Nov +6.00
25
10 Oct
Nov +5.25
25
Dec rate +6.50
75
Nov rate
22 Jun
Nov-11.50
Volume
Midcontinent deals
¢/USG
Grade
hh
Price
Badger ULSD
C1 Oct
Nov +4.50
15
BCX ULSD
4 Oct
Nov +5.00
25
21 Sep
West coast deals
Grade
Timing
LA Jet
Nov
Dec-5.00
25
2H Oct
Nov-4.00
25
Oct
Nov-3.50
25
Oct
Nov-3.50
25
Nov
Dec+4.00
25
Oct
Nov+6.50
25
Oct
Nov+8.00
25
LA Carb ULSD
SF Carb ULSD
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Page 11 of 25
Price
Volume
Argus US Products
Issue 16-190 | Monday 3 October 2016
Clean product forward curves
Physical
Timing
¢/USG
Basis
Differential
Price
±
Cycle 49
Nov
+8.00/+9.25
155.05-156.30
+0.44
Cycle 50
Nov
+8.00/+9.25
155.05-156.30
+0.44
Cycle 51
Nov
+8.00/+9.25
155.05-156.30
+0.44
87 conv Colonial M offline NYH
Physical (continued)
Timing
¢/USG
Basis
Differential
Price
±
Prompt
Nov
-10.00/-9.85
145.32-145.47
+0.55
10 days forward
Nov
-9.90/-9.75
145.42-145.57
+0.66
15 days forward
Nov
-9.80/-9.65
145.52-145.67
+0.76
20 days forward
Nov
-9.70/-9.55
145.62-145.77
+0.86
Jet New York barge
Reg RBOB New York barge
Prompt
Nov
+2.40/+3.00
149.45-150.05
+0.21
10 days forward
Nov
+2.00/+2.50
149.05-149.55
+0.89
Cycle 51
Nov
-10.25/-9.75
145.07-145.57
+0.49
15 days forward
Nov
+1.50/+2.00
148.55-149.05
+0.89
Cycle 52
Nov
-10.00/-9.50
145.32-145.82
+0.74
20 days forward
Nov
+1.00/+1.50
148.05-148.55
+0.89
Cycle 53
Nov
-9.75/-9.25
145.57-146.07
na
Any Oct
Nov
+1.00/+1.25
148.05-148.30
+1.48
Prompt
Nov
+15.25/+15.75
162.30-162.80
+0.69
10 days forward
Nov
+15.25/+15.75
162.30-162.80
+0.69
15 days forward
Nov
+15.25/+15.75
162.30-162.80
+0.69
20 days forward
Nov
+15.25/+15.75
162.30-162.80
+0.69
Cycle 56
Nov
+2.00/+3.25
149.05-150.30
+1.12
Cycle 57
Nov
+1.50/+2.75
148.55-149.80
+1.37
Cycle 58
Nov
+1.25/+2.50
148.30-149.55
Cycle 59
Nov
+1.25/+2.50
148.30-149.55
Cycle 56
Nov
+0.50/+1.00
147.55-148.05
+1.12
Cycle 57
Nov
0.00/+0.25
147.05-147.30
+1.62
Cycle 58
Nov
-0.25/ 0.00
146.80-147.05
+1.49
Cycle 59
Nov
-0.25/ 0.00
146.80-147.05
na
Kerosine New York barge
Prem RBOB New York barge
87 conv Colonial M
Heating oil New York barge
Prompt
Nov
-11.75/-11.25
143.57-144.07
+2.48
10 days forward
Nov
-11.50/-11.00
143.82-144.32
+2.64
15 days forward
Nov
-11.25/-10.75
144.07-144.57
+2.79
20 days forward
Nov
-11.00/-10.50
144.32-144.82
+2.94
Any Oct
Nov
-10.75/-10.25
144.57-145.07
Nov
-9.00/-8.50
146.32-146.82
+0.49
+0.49
Heating oil Colonial Linden
Cycle 51
Nov
-8.75/-8.25
146.57-147.07
Cycle 52
Nov
-8.50/-8.00
146.82-147.32
Cycle 50
Nov
-6.75/-6.25
148.57-149.07
+0.99
Cycle 51
Nov
-6.75/-6.25
148.57-149.07
+0.99
Cycle 52
Nov
-6.50/-6.00
148.82-149.32
na
ULSD New York barge
Prompt
Nov
-1.80/-1.30
153.52-154.02
+0.93
10 days forward
Nov
-1.70/-1.20
153.62-154.12
+0.94
15 days forward
Nov
-1.60/-1.10
153.72-154.22
+0.94
20 days forward
Nov
-1.50/-1.00
153.82-154.32
+0.94
Any Oct
Nov
-1.40/-0.90
153.92-154.42
+4.50/+5.50
159.82-160.82
+4.50/+5.50
159.82-160.82
+1.49
15 days forward
Nov
+4.50/+5.50
159.82-160.82
+1.49
20 days forward
Nov
+4.50/+5.50
159.82-160.82
+1.49
Cycle 54
Nov
-15.50/-15.00
139.82-140.32
+1.99
Cycle 55
Nov
-15.75/-15.25
139.57-140.07
+1.99
Cycle 56
Nov
-15.75/-15.25
139.57-140.07
+1.99
Cycle 57
Nov
-15.75/-15.25
139.57-140.07
+1.99
Heating oil Colonial 77
Cycle 50
Nov
-12.00/-11.50
143.32-143.82
+2.49
Cycle 51
Nov
-11.00/-10.50
144.32-144.82
+3.24
Cycle 52
Nov
-10.50/-10.00
144.82-145.32
na
Cycle 54
Nov
-2.00/+1.00
153.32-156.32
+2.99
Cycle 55
Nov
-2.00/-0.35
153.32-154.97
+2.81
Cycle 56
Nov
-2.00/-0.85
153.32-154.47
+2.81
Cycle 57
Nov
-2.00/-1.10
153.32-154.22
+2.69
ULSD Colonial 62
Jet Colonial 54
Cycle 55
Nov
-11.35/-11.25
143.97-144.07
+1.44
Cycle 56
Nov
-11.35/-11.25
143.97-144.07
+1.44
Cycle 57
Nov
-11.35/-11.25
143.97-144.07
+1.44
Cycle 58
Nov
-11.35/-11.25
143.97-144.07
Cycle 50
Nov
-0.25/+0.15
155.07-155.47
+1.74
Cycle 51
Nov
-0.15/+0.25
155.17-155.57
+1.74
Cycle 52
Nov
-0.05/+0.35
155.27-155.67
na
Timing
¢/USG
Basis
Differential
Price
±
ULSD Colonial 62
Oct
Nov
-3.50/-2.50
151.82-152.82
+1.49
Nov
Dec
-5.60/-5.00
150.78-151.38
+1.55
Dec
Jan
-7.50/-7.00
150.26-150.76
+1.61
Jan
Feb
-6.50/-5.50
152.38-153.38
+1.72
Feb
Mar
-5.75/-4.75
153.67-154.67
+1.84
Mar
Apr
-5.00/-4.00
154.23-155.23
+1.92
87 conv Colonial M
ULSD Colonial Linden
Licensed to: Cortney Becker, Argus Media Inc (New York)
Nov
Nov
Swaps
ULSH Colonial Linden
Copyright © 2016 Argus Media group
Prompt
10 days forward
Heating oil Colonial 77 offline
Reg CBOB Colonial A
Cycle 50
Jet Colonial Linden
Oct
Nov
-0.25/+0.75
146.80-147.80
+0.74
Nov
Dec
-3.00/-2.00
141.68-142.68
+1.22
Dec
Jan
-6.75/-5.75
137.76-138.76
+1.42
Jan
Feb
-6.25/-5.25
139.61-140.61
+1.60
Feb
Mar
-5.25/-4.25
142.79-143.79
+1.62
Mar
Apr
-17.00/-16.00
148.90-149.90
+1.45
Page 12 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Biofuels and blending components
Ethanol
Ethanol
US ethanol markets rebounded Monday as CBOT corn futures
soared to an 11-week high alongside stronger RBOB futures.
CBOT corn futures rose for a second straight session after
the US Department of Agriculture (USDA) released its weekly
inspection report, which showed 1.47mn tons of corn were
inspected for export for the week ending 29 September; up
by more than 8pc from the previous week. The USDA also
released its Weekly Crop Progress Report, which rated 73pc of
the US corn crop as good-to-excellent. This was down by 1pc
from the previous week's report, but still up by 5pc year-overyear. The report also showed that 24pc of the US corn crop has
already been harvested, which is 9pc higher week-over-week.
Ethanol export activity continues to underpin the market
as an 8,000t shipment is scheduled to depart from the US Gulf
coast for Korea between 2-12 October.
At Kinder Morgan’s Argo ethanol hub, prompt barrels
gained one-cent after commerce was done between 157¢ and
157.5¢/USG, while deals were heard done early at 155¢ and
156¢/USG.
New York Harbor values neared a 14-week high after October barges surged by 3¢ as commerce was done at 166¢/USG.
November barges were talked early to either side of 156.75¢/
USG before discussion moved higher in the afternoon.
Chicago Rule 11 railcars shipping this week rose by a
quarter-cent with trade at 154¢/USG for ten cars.
Fob Nebraska Union Pacific railcars shipping this week
surged 3.25¢ as a trade occurred at 145.5¢/USG for ten cars.
Arizona railcars shipping this week were talked between
163¢ and 167¢/USG, but transactions were not reported.
At the west coast, NorCal cars shipping this week were
discussed between 171¢ and 173¢/USG without trade.
RIN spreads
¢/RIN
Today
± Prior day
5-day avg
Category spreads, 2015
Biodiesel D4-ethanol D6
11.50
-1.25
12.75
Biodiesel D4-advanced biofuel D5
1.00
0.00
1.00
12.30
1.00
Advanced biofuel D5-ethanol D6
10.50
-1.25
11.75
11.30
13.22
Category spreads, 2016
12.25
-1.25
13.50
Biodiesel D4-advanced biofuel D5
Biodiesel D4-ethanol D6
0.75
0.00
0.75
0.95
Advanced biofuel D5-ethanol D6
11.50
-1.25
12.75
12.28
Biodiesel D4
-1.25
0.00
-1.25
-1.45
Advanced biofuel D5
-1.50
0.00
-1.50
-1.50
Ethanol D6
-0.50
0.00
-0.50
-0.52
Vintage spreads, 2015-2016
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Chicago
Argo in-tank prompt
Weighted average
Argo in-tank any Oct
Rule 11 rail prompt
New York Harbor
Barge any Oct
US Gulf coast/south
Houston barge/rail
Tampa rail
Atlanta rail
Dallas rail
Nebraska
Union Pacific rail
BNSF rail
Los Angeles
Low-carbon intensity rail
Brazil
fob anhydrous $/m3
fob anhydrous BRL/m3
fob hydrous $/m3
fob hydrous BRL/m3
del anhydrous $/m3
del anhydrous BRL/m3
¢/USG
Low
High
±
155.00
+1.00
150.50
153.50
157.50
157.25
153.00
154.50
-3.00
+0.25
165.00
167.00
+3.00
158.50
173.00
166.00
156.50
161.00
175.50
168.50
159.00
+1.00
+1.00
+1.00
+1.00
143.00
143.00
145.50
145.50
+3.25
+3.25
171.00
173.00
+2.00
470.00
1,515.84
455.00
1,467.47
440.00
1,419.09
633.00
2,041.55
590.00
1,902.87
490.00
1,580.35
0.00
-10.70
Differential
Price
±
328.82-343.82
75.32-90.32
-2.26
-3.51
323.82-336.82
70.32-83.32
+6.24
+4.99
344.32-352.32
90.82-98.82
+2.74
+1.49
Biodiesel
¢/USG
New York Harbor rail
B100 SME Nov
+173.50/+188.50
B99 SME Nov
-80.00/-65.00
Houston rail/barge
B100 SME Nov
+168.50/+181.50
B99 SME Nov
-85.00/-72.00
Chicago In-tank transfer Argo
B100 SME Nov
+189.00/+197.00
B99 SME Nov
-64.50/-56.50
RINs
¢/RIN
Low
Renewable fuel (ethanol)
2014
90.50
2015
90.50
2016
90.00
Weighted average
2017
89.25
Biomass-based diesel
2014
101.50
2015
102.75
2016
101.50
2017
103.50
Cellulosic biofuels
2014
123.00
2015
159.00
2016
209.00
Advanced biofuels
2014
101.00
2015
101.50
2016
100.00
Renewable volume obligation (RVO) ¢/USG
2015
2016
Page 13 of 25
-10.13
+6.50
+12.07
High
±
92.00
92.00
91.50
90.79
91.00
+2.00
+2.00
+2.00
+2.00
103.00
104.25
103.00
106.00
+0.75
+0.75
+0.75
+0.75
125.00
161.00
211.00
0.00
0.00
+4.00
103.50
104.00
102.50
+0.75
+0.75
+0.75
8.92
9.53
+0.17
+0.18
Argus US Products
Issue 16-190 | Monday 3 October 2016
Biofuels and blending components
Biofuel spreads
Brazil
Brazilian ethanol markets started off the week on a bullish
note as strengthening corn and gasoline markets in the US
lifted prices for imported deliveries. In Sao Paulo, hydrous fuel
ethanol prices posted modest gains in a thinly-traded session.
Delivered markets were up $7/m³ to $440-490/m³ for October shipments to ports on the northeastern coast of Brazil,
bolstered by rising physical markets in the US.
Export values remained unaltered, meanwhile, as a contango continued to permeate the 4Q market. Anhydrous fuel
ethanol shifted in the $470-633/m³ range, against $455-590/m³
for the hydrous fuel specification.
In Sao Paulo, spot hydrous ethanol were up R2/m³ to hold
near R1,991/m³ including 12pc ICMS tax in Ribeirao Preto as
limited prompt availability continued to buttress the market.
RINs
The RINs market firmed Monday on carry-through buying following the Department of Justice’s settlement with Chemoil
late last week which will see the retirement of 65mn RINs.
The 2016 vintage D4 biomass-based diesel RINs neared
a six-week high, firming 0.75¢ as the credits were traded
between 102¢ and 103¢/RIN, while a deal was heard done at
101.5¢/RIN. The B16/E16 spread compressed 1.25¢ to settle at
11.5¢/RIN.
Futures
CBOT ethanol ¢/USG
Oct 16
Nov 16
Dec 16
Jan 17
CBOT corn ¢/bushel
Dec 16
Mar 17
May 17
Jul 17
CBOT soybean oil ¢/lb
Oct 16
Dec 16
Jan 17
Mar 17
CBOT soybeans ¢/bushel
Nov 16
CBOT soybean meal $/t
Oct 16
Settlement
±
157.00
151.50
147.10
143.90
+2.30
+2.70
+2.70
+2.70
346.00
355.75
362.75
369.00
+9.25
+9.25
+9.25
+8.75
33.05
33.24
33.48
33.73
-0.19
-0.20
-0.19
-0.18
973.00
+19.00
305.90
+8.00
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Differential
Ethanol crush $/bushel
Heating oil-soybean oil ¢/USG
+0.94
-0.93
Ethanol forward curves
¢/USG
Oct
Nov
Dec
Jan
Chicago
New York
150.50-153.00
145.25-147.75
141.00-143.50
138.75-141.25
165.00-167.00
156.75-159.75
151.50-154.50
148.25-151.25
Blendstocks
¢/USG
Basis
Alkylate
NY barge ex duty
Houston
Raffinate
Houston
Reformate
NY barge ex duty
Houston
Differential
Price
±
Nov
87 conv M pipe
+8.50/+11.50
+13.00/+16.00
155.55-158.55
162.68-165.68
+0.81
+2.87
87 conv M pipe
-28.00/-26.00
121.68-123.68
+3.12
Nov
87 conv M pipe
+30.50/+34.50
+35.00/+37.00
177.55-181.55
184.68-186.68
+0.81
-0.88
Ask
Price
±
12.88
12.90
13.20
Summer
10.38
10.41
10.35
10.38
10.34
10.37
13.19
13.23
+0.01
+0.01
0.00
+0.01
+0.08
0.00
+0.08
+0.01
+0.09
+0.02
+0.11
3.80
3.80
4.72
4.72
+0.01
+0.07
+0.01
+0.07
90.00
0.00
na
0
0
0.73
1.14
0.00
0.00
3.18
3.18
0.00
0.00
Carbon
Vintage
Del
Bid
California carbon allowances (CCA) $/t
2016
Oct 16
12.85
12.91
2016
Dec 16
12.87
12.93
2017
Dec 17
13.10
13.30
CCA price ¢/USG
Winter
Regular CARBOB
10.35
+0.01
Month index Sep
Midgrade CARBOB
10.35
+0.01
Month index Sep
Prem CARBOB
10.36
+0.01
Month index Sep
ULSD
Month index Sep
Quebec carbon price for gasoline, diesel CA¢/l
Gasoline
Gasoline month index Sep
Diesel
Diesel month index Sep
California low-carbon fuel credits (LCFS) $/t
2015-16
88.00
92.00
VWA MTD
Number of trades MTD
Volume MTD
LCFS premium per carbon intensity point ¢/USG
Ethanol
Biodiesel
LCFS cost for gasoline, diesel ¢/USG
CARBOB
ULSD
Page 14 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Biofuels and blending components
Current year D6 ethanol credits reached a five-week, rising
two-cents as commerce was done between 90¢ and 91.5¢/RIN.
The E15/E16 spread was talked at +0.5¢/RIN, but transactions
were not reported.
The 2016 vintage D3 cellulosic continued to find upward
momentum as commerce was done for QAP credits at 210¢/
RIN. The 2014 vintage D3 credits were offered at 125¢/RIN, but
failed to draw out buyers.
The costs of compliance as measured by Argus Renewable
Volume Obligation (RVO) reached a nine-week high after climbing 0.18¢ to 9.53¢/USG.
Ethanol deals
Timing
Chicago Argo
3 Oct
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Price
Volume
4 Oct +0
5
8 Oct-18 Oct
157.00
5
8 Oct-18 Oct
157.50
5
Chicago Rule 11
4 Oct-8 Oct
154.00
7
Nebraska UP
4 Oct-8 Oct
145.50
7
New York Harbor
Any Oct
166.00
25
Any Oct
166.00
25
RINS deals
Grade
Timing
Biodiesel
Biodiesel
US biodiesel premiums were higher Monday as D4 RINs prices
neared a six-week high, while outright prices rose as the ULSD
benchmark climbed nearly 1.5¢/USG to settle near a fourmonth high of 155.32¢/USG.
CBOT soybean futures rose for a third straight session after
a bullish US Department of Agriculture (USDA) weekly inspection report, which showed that 1.104mn tons of soybeans were
inspected for export for the week ending 29 September, up by
more than 186pc week-over-week. The USDA also released its
Weekly Crop Progress Report late Monday which showed that
74pc of the US soybean crop was rated as good-to-excellent,
up by 1pc from the previous week's report and up by 10pc
year-over-year. The report also showed that 26pc of the US
soybean crop had been harvested, up by 16pc week-over-week,
but down by 10pc year-over-year.
Blend margins strengthened during the session as the
heating oil/soybean oil (HOBO) spread neared a ten-week after
rising 0.04¢ to settle at -0.93/USG.
New York Harbor B99 SME for October was bid at Nymex
-80¢/USG, or Nymex +173.5¢/USG with RINs and the blenders
tax credit (BTC).
At the New York Harbor, RIN-less and credit-less Q1 SME
material was on offer at 45¢ under the screen against buyers
at Nymex -65¢/USG.
Houston B99 SME for prompt timing was seen between
Nymex -85¢/USG and Nymex -72¢/USG, but transactions were
not reported.
Iowa B100 SME for November-December delivery was seen
between Nymex +164¢ and Nymex +179¢/USG, but transactions
were not reported.
’000 bl
Grade
Price
Volume
2016
102.00
2000
2016
102.50
2000
2016
103.00
720
2016
103.00
1500
500
2016
103.00
Cellulosic
2016
210.00
200
Ethanol
2016
90.00
1000
2016
90.00
500
2016
90.50
1000
2016
90.50
1000
2016
90.50
500
2016
90.50
525
2016
91.00
1000
2016
91.00
1000
2016
91.00
1000
2016
91.50
1000
2016
91.50
1000
Portland EPA ULSD vs San Fran EPA ULSD
¢/USG
20
10
hh
hh
0
-10
Page 15 of 25
5 Jul
3 Aug
1 Sep
3 Oct
Argus US Products
Issue 16-190 | Monday 3 October 2016
Biofuels and blending components
Argentina
Argentinian soy oil values weakened marginally in a thinlyparticipated session Monday.
October premiums for fob San Lorenzo cargos ticked 0.03¢/
lb higher to CBOT +1.33¢/lb, failing to offset a 0.2¢/lb drop in
the paper markets as December contracts settled at 33.24¢/lb.
November to December physical deliveries were up 0.05¢/lb at
CBOT +1.25¢/lb.
The biodiesel market ceded part of the gains posted on Friday as October shipments fell $3/t lower to $722/t for conventional biodiesel and $862/t for the EPA-approved specification.
California carbon
California carbon allowances (CCAs) were up slightly today.
Vintage 2016 allowances ticked up by a cent in moderate
trading. The December-delivery contract closed at $12.90/metric tonne after trading four times for a total of 49,000t.
Prompt-month CCAs ended the session at $12.88/t, also up
by a penny, after testing higher levels earlier in the session to
briefly trade near parity with the December contract. A total
of 250,000t of prompt-month CCAs exchanged hands in four
deals.
California Low-Carbon Fuel Standard (LCFS) credits held at
$90/t after failing to trade. Bids and offers nearly converged
early in the day, but the market seemed to fizzle later in the
session without producing a deal.
Blending components
The US Gulf coast blendstocks markets were lacking clear
direction on Monday.
There was a split in the market on the direction that
higher octanes should take. Meanwhile, as the next part of the
seasonal RVP shifts approached, low RVP values seems to be
losing their appeal.
The alkylate market was up following heavy selling pressure that depressed the cash differentials last week. The market rose 1.75¢/USG with the market gauged between US Gulf
coast gasoline pipeline mean (PLM) +13 to +16¢/USG.
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Raffinate also rose with the market at PLM -27¢/USG. Done
deals pulled the differentials 2¢/USG higher.
Reformate, meanwhile, slipped 2¢/USG lower with the
market talked at PLM +36¢/USG.
Assessment rationale
In the absence of trades, bids and offers for Houston B99 SME
at Nymex -85¢/USG and Nymex -72¢/USG, or Nymex +168.5¢/
USG and Nymex +181.5¢/USG when including RINs and the
blenders’ tax credit (BTC), were used to set the range for the
Argus Houston B100 SME assessment. The value was calculated
using the day’s B16 midpoint of 102.25¢/RIN, multiplied by 1.5,
adding the BTC value of 100¢ and subtracting the B99 bid and
offer.
A heard trade at 155¢/USG and a verified trade at 157.5¢/
USG were used to set the range for the Argus prompt Argo ITT
assessment.
Verified trades at 166¢/USG were used to set the midpoint
for the Argus New York Harbor barge assessment.
In the absence of trades, bids or offers, the previous session’s A15/A16 spread was left unchanged at +1.5¢/RIN, setting
the range for the Argus 2015 D5 RIN assessment.
In the absence of trades, bids or offers, the previous session’s A16/B16 spread was left unchanged at -1.5¢/-0.5¢ to set
the range for the Argus 2016 D5 RIN assessment.
In the absence of trades, bids or offers, the previous session’s B15/B16 spread was left unchanged at +1.25¢/RIN, setting the range for the Argus 2015 D4 RIN assessment.
A heard trade at 101.5¢/RIN and verified trades at 103¢/RIN
were used to set the range for the Argus 2016 D4 RIN assessment.
In the absence of trades, bids and offers for the E15/E16
at +0.5¢ were used to set the range for the Argus 2015 D6 RIN
assessment.
Verified trades at 90¢/RIN and 91.5¢/RIN were used to set
the range for the Argus 2016 D6 RIN assessment.
Page 16 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Feedstocks and residual fuel oil
Vacuum gasoil Gulf coast
Vacuum gasoil
Firm negotiations were elusive in Monday’s trading session as
rising crude oil prices weighed on VGO buying interest.
Catalytic cracker (FCC) margins were stable to slightly
stronger with VGO differentials unchanged at previously assessed levels.
An Indian sell tender offering three 45,000t cargoes of
0.5pc typical sulphur VGO was heard closed last Friday, but
results have yet to be verified. One cargo will be delivered per
month for November, December and January.
A Brazilian offer to sell a full cargo of low sulphur coker
gas-oil (CGO) was also heard on the table late last week. The
cargo of 0.34pc sulphur, 170 aniline, 2700 nitrogen CGO with
21 API, less than 0.1 MCRT, 950 FBP with 4pc residue was
heard subsequently sold to a major, but no details were verified.
The market saw a sluggish start to the trading week as
crude values soared early in the day. November Nymex crude
finally settled at $48.81/bl on Monday, $0.57/bl over Friday’s
mark. December Nymex WTI was $0.59/bl lower than the
November settlement for the day.
Several buyers with lingering demand from late last week
were quiet Monday. These buyers represented refiners with
planned crude unit work at their respective refineries in October. However, VGO requirements were no seen reiterated.
A refiner was subsequently heard seeking prompt low sulphur VGO for delivery to its Texas refinery, but it was unclear
if a deal was struck here. No specific low sulphur VGO prices
were mentioned under discussions. The majority of market
participants indicated that VGO differentials to crude oil futures were steady in Monday’s thin session.
No new developments were observed in the high sulphur
VGO barge market Monday. The sour grade had been dominant
much of last week before yielding to low sulphur VGO activity
last Friday. A $1/bl spread is maintained between the low and
high sulphur grades.
VGO cargo talk was also scarce Monday, outside of the Indian tender mentioned above. Cargo prices were still deemed
at a marginal $0.25/bl premium to barges amid continuing
interest in the former.
Light cycle oil (LCO) selling interest was significantly elevated this week with at least four sellers seen in the market,
but no deals were verified done. The emergence of sellers was
loosely attributed to hydrocracker turnarounds slated to begin
in the fourth quarter.
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Basis
Differential
Price
56.06-56.56
Differential to WTI $/bl
0.5% cargo
Nov
+7.25/+7.75
0.5% barge
Nov
+7.00/+7.50
55.81-56.31
1.0% cargo
Nov
+6.75/+7.25
55.56-56.06
1.0% barge
Nov
+6.50/+7.00
55.31-55.81
2.0% cargo
Nov
+6.25/+6.75
55.06-55.56
2.0% barge
Nov
+6.00/+6.50
54.81-55.31
Differential to 70:30 87 conv/heating oil ¢/USG
0.5% cargo
-14.56/-13.37
133.48-134.67
0.5% barge
-15.16/-13.97
132.88-134.07
1.0% cargo
-15.75/-14.56
132.29-133.48
1.0% barge
-16.35/-15.16
131.69-132.88
2.0% cargo
-16.94/-15.75
131.10-132.29
2.0% barge
-17.54/-16.35
130.50-131.69
Differential to 70:30 87 conv/ULSD ¢/USG
0.5% cargo
-18.99/-17.80
133.48-134.67
0.5% barge
-19.59/-18.40
132.88-134.07
1.0% cargo
-20.18/-18.99
132.29-133.48
1.0% barge
-20.78/-19.59
131.69-132.88
2.0% cargo
-21.37/-20.18
131.10-132.29
2.0% barge
-21.97/-20.78
130.50-131.69
87 conv waterborne/heating oil
+1.38
147.53-148.56
87 conv waterborne/ULSD
+1.68
151.58-153.36
Differential
Price
70:30 formulas ¢/USG
Naphtha barge Gulf coast
Basis
Heavy (40 N+A) ¢/USG
87 conv
-33.00/-31.00
Heavy (40 N+A) $/t
Full range ¢/USG
117.93-119.93
419.83-426.95
87 conv
-36.00/-33.00
Full range $/t
114.93-117.93
417.20-428.09
LSR/LV ¢/USG
C5
-1.00/+3.00
LSR/LV $/t
106.50-113.38
423.87-451.23
Natural gasoline ¢/USG
107.50-110.38
Natural gasoline $/t
451.50-463.58
Light cycle oil
¢/USG
Basis
Differential
Price
±
0.5% sulphur
USGC HO
2.0 % sulphur
USGC HO
+1.00/+1.50
142.32-142.82
+1.99
+0.50/+1.00
141.82-142.32
+1.99
CME Nymex
Price
±
WTI crude $/bl
Nov
48.81
+0.57
Dec
49.40
+0.58
Jan
50.01
+0.61
Henry Hub natural gas $/mmBtu
Nov
2.923
+0.02
Dec
3.170
+0.04
Page 17 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Feedstocks and residual fuel oil
Buying interest was not easily detected Monday and no
business was heard done. The presence of multiple offers
exerted downward pressure on LCO differentials to Gulf coast
heating oil (HSD), however, numbers were heard still holding
their ground at previous levels.
Naphtha
Heavy N+A naphtha differentials fell Monday behind a persistently long market and a more than 1¢/USG rise in the Gulf
coast waterborne conventional 11.5 RVP(GC WBM M3) gasoline
pricing basis.
A major that had been offering standard quality 38 N+A
naphtha with 110 IBP and 63 maximum API within a narrow
afternoon trading window remained a seller in that forum.
On Monday, the major offered the same grade at GC WBM M3
-32.5¢/USG for 8-10 October delivery.
Last Friday, the same major had offered the standard naphtha barge at GC WBM M3 -30.5¢/USG for 2-4 October delivery,
but there were no takers as well. Bids and offers within this
afternoon trading window are pegged against a non-Argus GC
WBM M3 basis.
Outside the window, a 50,000 bl barge of 31.75 N+A naphtha with 125 IBP, 177 t10, 63.2 API and 3.88 RVP was offered at
GC WBM M3 -35¢/USG for 4-6 October delivery to Houston. No
business was reported done here as well.
Meanwhile, light naphtha activity was stymied by burgeoning natural gasoline (C5) prices. Prices for C5 maintained a
previous uptrend to rise 2.44¢/USG from Friday’s assessment.
Downward pressure on light naphtha differentials to C5 was
evident, but the lack of firm negotiations clouded price discovery.
Offers were still cited at the higher levels, but no specific
bids were noted for the day. High sulphur Targa was offered up
to C5 +5¢/USG and low sulphur Targa was offered at C5 +7¢/
USG without takers.
Light naphtha buyers reportedly indicated buying interest
at unspecified discounts to C5, however, there were no serious
discussions detected.
Fuel oil
Fuel oil prices opened the week higher, tracing strengthening
crude oil markets.
Gulf coast prices notched a fourth straight day of gains as
steady demand contributed to upward momentum brought on
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Residual fuel oil
$/bl
Price
±
New York waterborne
0.3% low pour
50.56/50.64
+0.41
0.3% high pour
48.10/48.20
+0.25
1%
41.25/41.35
+0.25
3%
40.50/40.60
+0.55
38.75/39.00
+0.55
Gulf coast waterborne
3%
1% New York swaps
Oct
41.20/41.30
+0.50
Nov
41.00/41.10
+0.45
Dec
41.00/41.10
-n/a-
Oct
38.60/38.70
+0.50
Nov
38.35/38.45
-n/a-
3% Gulf coast swaps
Bunker fuel
$/t
Price
±
180cst
New York
292.00-297.00
+5.00
Philadelphia
Houston
370.00-378.00
Price
±
380cst
263.00-268.00
+4.50
270.50-275.50
+4.50
-15.00
245.00-250.00
-10.00
Los Angeles
350.00-353.00
+2.00
282.00-285.00
+1.50
Seattle
304.00-310.00
+2.00
260.00-265.00
+1.50
by price rises in global crude markets. There were two 3pc
sulphur residual fuel oil barge lots sold loading in the Gulf, one
at $38.75/bl and the other at $39.00/bl. A vessel was placed
on subjects to load a 55,000t straight run residual fuel oil
refinery feedstock cargo 18 October in Europe for import into
the US Gulf.
Demand was muted on the Atlantic coast. The backwardation in New York Harbor 1pc sulphur residual fuel oil third
over front month swap prices narrowed to 20¢/bl.
Marine fuels
Rising crude markets added upward pressure to bunker prices
and limited demand urgency on Monday.
Gulf coast demand was light and prices there slipped lower
despite higher crude futures. A supplier in New Orleans fixed
a 430t lot of high-sulphur 380cst at $257/t ex-wharf. The supplier also booked two MGO clips: 150t at $430/t ex-wharf, and
110t at $540/t delivered. High-sulphur 380cst was indicated
at $250-255/t ex-wharf in Houston and MGO was heard there
at $495/t ex-wharf. A vessel was booked to load a 55,000t
straight run residual fuel oil refinery feedstock cargo on 18
Page 18 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Feedstocks and residual fuel oil
October in Europe for import into the US Gulf.
New York Harbor high-sulphur 380cst and MGO were respectively indicated at $268/t and $460-465/t ex-wharf, but
demand there was weak and no deals were heard.
West coast bunker markets opened the week on a quiet
note. Barge congestion in Los Angeles was improving, but
continued to support higher prices there. One supplier was
rumored to be unable to offer due to lack of product. Another
supplier fixed a 1,200t lot of high-sulphur 380cst at $285/t
ex-wharf for prompt delivery within two to three days. The
supplier indicated high-sulphur 380cst at $282/t ex-wharf for
forward delivery dates. The supplier indicated MGO at $525/t
ex-wharf, but a trader saw indications for MGO at around
$495/t ex-wharf.
In San Francisco a trader quoted 1,000t high-sulphur 380cst
SME Houston fob B100 vs Gulf Coast ULSD
at around $310/t delivered. Demand there was muted and no
deals were heard. Supplier indications in Vancouver, British
Columbia increased tracing crude despite weak demand there.
High-sulphur 380cst and MGO were respectively indicated at
$288-289/t and $610-615/t ex-wharf.
Assessment rationale
NYH 1pc sulphur residual fuel oil was assessed at $41.25-41.35/
bl tracing a 25¢/bl increase in NYH 1pc sulphur residual fuel oil
front month swap prices. There were no bids, offers or deals
heard.
USG 3pc sulphur residual fuel oil was assessed at $38.75-39.00/
bl based on two 3pc sulphur residual fuel oil barge lots sold
loading in the Gulf, one at $38.75/bl and the other at $39.00/
bl. The deals set the range.
LA ethanol vs Chicago ethanol
¢/USG
Houston B100 SME vs GC ULSD USC/USG
Los Angeles Ethanol vs Chicago Ethanol USC/USG
190
25
180
20
-- 170
hhh
--
160
hhh
15
10
150
22 Jun
¢/USG
5
22 Jul
22 Aug
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
21 Sep
5 Jul
Page 19 of 25
3 Aug
1 Sep
3 Oct
Argus US Products
Issue 16-190 | Monday 3 October 2016
Infrastructure news
Phillips 66 begins Alliance maintenance
Heavy weekend flaring at PBF Torrance
Planned maintenance is underway today at Phillips 66's 247,000
b/d Alliance refinery in Belle Chasse, Louisiana.
The refiner did not comment on the units involved or
planned duration of the work.
An unidentified issue triggered heavy flaring late last week at
PBF Energy's 155,000 b/d refinery in Torrance, California.
PBF declined to comment on the status of operations
today.
The refiner reported at least 30 minutes of increased flaring on 1 October in a 9:21pm ET filing to a community alert
system.
Pasadena Refining shuts FCC for repair
Pasadena Refining shut a gasoline-producing unit yesterday for
repairs at its 100,000 b/d refinery in Pasadena, Texas.
Repairs to a leaking valve on a fluid catalytic cracking (FCC)
unit increased emissions for 30 minutes beginning at 2:26am
ET, according to a filing to state environmental regulators.
A company representative could not be immediately
reached for comment.
Valero Port Arthur FCC malfunctions
An unidentified malfunction increased flaring late last week at
Valero’s 325,000 b/d refinery in Port Arthur, Texas.
The refiner reported increased emissions from a fluid catalytic cracking (FCC) unit for 24 hours beginning at 4:50pm ET,
according to a filing to state environmental regulators.
Industry news
Distillate line space trades at record low
US auto sales up 4.5pc in September
Colonial pipeline distillate line space traded at its lowest level
on record today as US Gulf coast ultra-low sulfur diesel (ULSD)
remained closely valued with material on the US Atlantic
coast.
Valuations last week bottomed out at their lowest levels
on record as discussions for prompt space fell to either side
of -4¢/USG, although ultimately no trades were detected at
those levels. Today was the first time that distillate line space
traded below -2.5¢/USG since the assessment first started on
26 September, 2014.
Negative line space values indicate that shippers who have
been allocated space on the pipeline are paying other shippers
to use it.
Gulf coast ULSD on the Colonial Pipeline was valued at a
+1.75¢/USG discount to material coming off the pipe at Linden,
New Jersey at 2:45pm EST.
Line space markets allow shippers who are allocated more
shipping volume on a pipeline than they need to offload the
space temporarily without being penalized and losing future
access.
Line space trades involve a sale of the commodity at a line
segment's origin and a purchase of the same commodity at a
destination point, which cancels out the original sale. The difference between the two determines the prices for line space.
The pace of US retail auto sales rose by 4.5pc to a seasonally adjusted annual rate of 17.76mn units in September from
the prior month, led by increases for both car and light truck
sales.
Sales of light vehicles climbed from an annual rate of 17mn
units in August, according to Autodata. Sales of cars and light
trucks last month fell from a 18.05mn unit pace in September
last year.
Sales of cars climbed by 6.8pc to 7.24mn in September
while sales of light trucks climbed by 2.8pc to 10.51mn units
from the prior month.
Sales of domestically produced vehicles increased by 5.3pc
to 14.15mn units, while sales of imported vehicles were 1.4pc
higher to 3.61mn units from August.
July's pace was the highest this year at 17.88mn. The pace
of sales peaked at a 18.16mn rate in October last year.
Un-seasonally adjusted, sales fell by 0.5pc to 1.43mn light
vehicles in September from 1.44mn units a year earlier. Sales
of passenger cars fell by 7.1pc to 575,114, and sales of light
trucks rose by 4.5pc to 860,575.
Sales of General Motor's light vehicles were 0.6pc lower
from a year earlier at 249,777 units in September.
Sales of Ford Motor vehicles fell by 8.1pc to 203,444, and
sales of Fiat Chrysler fell by 0.1pc to 192,883 in September
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Page 20 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Industry news
from a year earlier.
Toyota Motor sales rose by 1.5pc to 197,260 and US Honda
Motor sales fell by 0.1pc to 133,655 units in September from a
year earlier.
Canada announces federal carbon price
Canadian Prime Minister Justin Trudeau (L) today proposed
imposing a federal price on carbon emissions starting in 2018,
marking the country’s first major federal plan to combat climate change.
Trudeau proposed a minimum initial carbon price of
$10CAD/tonne ($7.83/t) in 2018 that would rise by $10/y to
2022. The proposal would give provinces and territories flexibility to decide how they would price carbon, including placing
a direct tax on carbon or through a cap-and-trade system. The
Canadian government said that all revenues from any carbon
pricing mechanism would remain with the provinces and territories to use “as they see fit.”
The proposal marks the first major national plan in Canada
to curb climate change and follows on a series of provincial
plans to cut carbon emissions. British Columbia has had a carbon tax in place since 2008 and Quebec has a cap-and-trade
program, which holds joint allowance auctions with California.
“Pricing pollution is one of the most efficient ways to
reduce greenhouse gas emissions and to stimulate innovation,"
Catherine McKenna, Canada's minister of Environment and
Climate Change, said.
Critics have called Canada’s climate policies piecemeal and
have said that even in aggregate, provincial policies would not
be sufficient to meet the national target to cut carbon emissions to 30pc below 2005 levels by 2030. Environmental groups
have challenged the federal government to establish a plan for
meeting the 2030 target.
Canadian environmental think tank the Pembina Institute
called the plan an “important milestone” and said it will “help
the country’s environment and economy as we compete for
the rapidly growing global demand for clean energy.”
The government of Alberta promptly challenged the proposal. Premier Rachel Notley (NDP) said the provincial government would not back the plan without federal support for a
pipeline from her province to the coast. Alberta had previously
contributed to previous national climate initiatives and would
not pay more “absent serious concurrent progress on energy
infrastructure, to ensure we have the economic means to fund
these policies,” Notley said.
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
California releases new LCFS scores
The California Air Resources Board (ARB) has published 70
carbon intensity scores for fuels, including nine new pathways.
The agency on 30 September released new Low-Carbon
Fuel Standard (LCFS) pathways for renewable natural gas
and updated scores for fuels such as a hydrogen, renewable
gasoline and renewable diesel that required re-certification
following the state’s readoption of LCFS regulations.
The new pathways for compressed natural gas from renewable sources had widely varying carbon intensity scores,
ranging from 33.56gCO2e/MJ for a Texas landfill project that
would deliver pipeline-quality biomethane to 80.59gCO2e/MJ
for natural gas compressed in California.
ARB previously made the new carbon intensity scores
available to applicants for the fuel pathways for their approval
before making the scores available to the public.
The newly certified pathways can be used for credit reporting beginning with reports for the third quarter. Carbon
intensity scores under the previous calculation system may
only earn credits through 31 December. After that date, only
new or recalculated credit intensity scores may be used.
Fuel pathway carbon intensity scores are a measure of lifecycle greenhouse gas emissions from the production and use of
a type of fuel. The state uses the scores to credit fuel producers who participate in the LCFS program.
Gunvor opens Houston office
Trading firm Gunvor has opened an office in Houston, its first
in the US.
The Geneva-based company will trade crude, refined products, bitumen and natural gas from its new offices. It said it
has secured a $500mn loan to support the new operations.
The office has 10 staff, but is growing, Gunvor said. The
company's other trading offices are in Geneva, Singapore,
Shanghai, Dubai and Nassau.
Gunvor is one of a number of trading firms to have diversified its activities into the refining and downstream sectors in
recent years. The firm operates almost 300,000 b/d of refining capacity in Europe — it owns the 115,000 b/d Independent
Belgian Refinery (IBR) in Antwerp, the 100,000 b/d Ingolstadt
refinery in Germany and has most recently purchased the
80,000 b/d Europoort refinery in Rotterdam from Kuwait's KPC.
These refineries produce large amounts of gasoline, and
the new Houston office could help Gunvor work the products
arbitrage between the US and Europe. Much of Europe and
Page 21 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Industry news
Russia's vacuum gasoil (VGO) goes to the US, and Europe takes
large volumes of diesel from the US.
Around 40pc of Gunvor's crude comes from the Americas,
according to the company.
The borrowing facility is jointly lead-arranged by Rabobank
and ABN Amro. The other lenders are ING, Natixis, Societe
Generale and Credit Agricole.
Gunvor generated $64bn in revenue last year, with a net
profit of $1.25bn.
EPA recommends biofuel rule tweaks
Products that are precursors to biofuels and are later finished
in a refinery would qualify for credits under federal biofuel
blending mandates, according to a rule proposed today by the
Environmental Protection Agency (EPA).
The proposed rule would also allow allow flex fuel vehicles
to legally run a broader array of ethanol blends.
The EPA proposal would clear the way for production of
credits used to show compliance with the federal Renewable
Fuel Standard using incomplete biofuels, or biointermediates,
finished into a final fuel at other biofuel processing and petroleum refining facilities.
The proposal designates foreign exporters of undenatured
ethanol as biointermediate producers, potentially eliminating
special requirements for foreign producers, according to the
agency.
The rule would also allow natural gasoline blending to
produce blends of 51pc to 83pc ethanol fuels known as E85,
while also regulating 16pc to 50pc blends as flex fuels, rather
than gasoline.
The change would allow retailers with dispensers that mix
ethanol blends on demand, called blender pumps, to sell the
mid-range ethanol products to flex fuel vehicles.
But biofuel groups today said the agency should ensure the
rule did not make it harder to access higher-ethanol blends.
The EPA should give 15pc ethanol the same exemptions
allotted to E10, the ubiquitous 10pc ethanol blend of gasoline
that can be sold to almost all vehicles and engines, ethanol
trade organization Growth Energy said. The 15pc blend, called
E15, can only be sold during winter months under federal
regulations.
"If this proposed rule is finalized, this regulation would
leave E15 as the only ethanol-blended fuel that does not have
Reid Vapor Pressure (RVP) relief," Growth Energy chief executive Emily Skor said.
The Renewable Fuels Association said that the rule should
also avoid impeding higher-ethanol flex fuels.
Both groups said they were still reviewing the proposal.
No conflict for Minnesota biodiesel law, RFS
A Minnesota law requiring retailers to increase summer
biodiesel blending does not conflict with federal mandates, a
federal judge has ruled.
Refiners, truckers and automobile dealers sought an injuncArgus 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 email at [email protected].
Announcement
Argus completes and extends annual Iosco assurance review
Argus has completed its fourth external assurance review of its price benchmarks, extending the scope of the process to
cover petrochemicals and fertilizers for the first time, as well as again covering crude, products, biofuels, thermal coal,
coking coal, natural gas and biomass 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 http://www.argusmedia.com/About-Argus/How-WeWork/
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Page 22 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Industry news
tion against state administrators of the Minnesota Mandate,
which requires every retail diesel gallon contain 10pc biodiesel
from 1 April to 30 September. That volume will increase to
20pc biodiesel in 2018.
Those businesses argued that the federal Renewable Fuel
Standard (RFS) — which mandates the renewable obligations
for refiners, importers and other fuel producers — preempted
the state law. The group is appealing the ruling.
Critics argued the state's per-gallon requirements were
specifically barred by the federal mandates, and the state system conflicted with federal efforts to give companies flexibility and a stable market for credits used to prove compliance,
called renewable identification numbers (RINs).
But that prohibition only applied to the Environmental
Protection Agency, the court said in an opinion issued late last
week.
"Indeed, by requiring all gallons of diesel fuel sold at retail
to contain a minimum percentage of biodiesel, the Minnesota
Mandate generates demand for biodiesel and incentivizes RFS
obligated parties to produce, acquire or blend biodiesel, which
in turn generates more RINs," the court wrote.
US corn, soybean harvests lag despite weather
US corn and soybean harvests continue to trail the five-year
averages, despite a break in the recent wet weather trend for
many growing areas over the past week.
The US corn harvest as of 2 October is 24pc complete, on
par with last year’s pace but three percentage points behind
the average, according to the US Department of Agriculture.
Rain over the past week limited fieldwork in Michigan, Ohio
and northeastern Indiana, while the majority of the Corn Belt,
Northern Plains and Southern Plains saw little to no rainfall.
The biggest delays have come in the Northern Plains and
Great Lakes regions, which trail their respective five-year
averages by six and four percentage points.
Iowa has seen a sizable delay to harvest at just 10pc
complete, nine points behind the five-year average, as it deals
with earlier flooding issues along its Mississippi river border.
Illinois' harvest pace accelerated with the arrival of more favorable weather, jumping by 19 points week-over-week to 43pc
complete, five points ahead of its five-point average.
Of the overall corn crop, 86pc has reached full maturity, up
by four percentage points year-over-year and by seven points
from the five-year average.
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
Late-season rains have had some impact on corn quality.
The percentage of corn rated in good to excellent condition
fell by one point from last week, but still stands five percentage points ahead of last year.
Harvest delays in the Great Lakes region and the Corn Belt
region have put this year’s soybean harvest at 26pc complete,
10 points behind last year and one point behind the five-year
average. Missouri was the only Corn Belt state to have harvest
progress top its historical average at 13pc complete, three
points ahead of the five-year average. The Delta leads the US
with 61pc of the region’s crop already harvested.
The US soybean crop is advancing at a faster-than-normal
pace with 83pc of the crop dropping leaves, up four percentage points from the five-year average and finally surpassing
last year's crop by one percentage point.
Soybean conditions were up by one percentage point from
the prior week at 74pc rated good-to-excellent. The number
of soybeans found to be in good-to-excellent condition at this
time last year was 64pc.
Planting of winter wheat is underway with 43pc of the
crop already in the ground, one point behind last year and two
points behind the five-year average. Nebraska farmers got an
early jump on the planting season this year at 85pc planted,
eight points ahead of the average.
Of the total crop, 20pc has already emerged, four points
ahead of last year and three points ahead of the average.
Nebraska also leads the US with 60pc emerged, 19 points more
than the five-year average.
Ecuador resets schedule for port expansion
Ecuador has reopened a tender for the concession of Manta
port after the sole bidder in the original auction had withdrawn amid mixed government signals over the process.
Bids must be submitted by 7 October, the winner will be
announced on 30 November and the 40-year concession contract should be signed on 14 December, according to Manta´s
Port Authority chief executive Jose Miguel Garcia.
Ecuador revived the tender after Chilean firm Agunsa withdrew its bid in an aborted auction in September.
Ecuador’s president Rafael Correa publicly apologized to
Agunsa after the process to award the concession fell apart
because of an apparently unintended 60-day delay.
The confusion sparked last month’s ouster of transportation minister Walter Solis. His replacement Boris Cordova,
Page 23 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Industry news
the former deputy minister, now heads the port concession
process.
Agunsa had pledged to invest at least $175mn to revitalize
and deepen the Manta port, and Quito vowed to disburse an
additional $105mn to upgrade the port´s infrastructure.
But under the new terms, in addition to the investment to
upgrade the port, the concession winner must pay a $280,000
annual fee indexed to inflation to Manta´s Port Authority, up
from the originally proposed $250,000 annual fee.
The concession holder should also pay a variable $42mn fee
over the life of the contract, up from the original $34mn.
It was not immediately clear if Agunsa plans to re-submit a
proposal.
The port has two terminals that handle containers, bulk
cargo and marine fuel, among other goods. Both terminals
handled 1mn metric tons of cargo last year, according to
Ecuador´s port authority.
The port is located in Manta province, which was hit by a
devastating earthquake in April 2016.
Announcements
Following consultation, Argus is making a series of changes to
its US Products report. For a full list of affected assessment
IDs, see below.
Effective 30 August, Argus will:
1. Exclude from its Gulf coast Colonial ULSD and Cbob assessments all “generic” transactions. Generic transactions are
defined as those that allow seller to deliver to buyer at injection points that will not count toward buyer’s ticketed history
on the Colonial line. This change follows a shift toward trade
in “non-Alabama” material.
2. Round all B100 differential assessments to the nearest
quarter-cent per gallon, rather than the nearest hundredth of
a cent per gallon.
Effective 22 September, Argus will discontinue its assessments of
3. 61 grade (ULSD), Colonial pipeline and waterborne.
Colonial 61 grade ULSD is no longer commonly traded following
a shift to mineral content only 62 grade.
4. Atlanta-grade gasoline on the Colonial pipeline. Following a change in US gasoline specifications, Atlanta grades are
no longer distinct from other US markets.
5. High-sulfur heating oil on the Buckeye and Laurel pipelines. Both pipelines have stopped shipping high-sulfur heating
oil as a fungible grade, and Argus has initiated coverage of
500ppm heating oil on both lines.
6. Clean freight rates for Asia Pacific – Chile and Singapore
– US west coast. Both transportation routes have become too
illiquid to support a robust price assessment.
Effective 22 September, Argus will also
7. Assume a cargo size of 38,000t for its USWC - Chile clean
Copyright © 2016 Argus Media group
Licensed to: Cortney Becker, Argus Media Inc (New York)
freight assessment, rather than the current 30,000t. This
change will result in the discontinuation of assessment code
PA0005185, and its replacement with PA0018588.
8. Assume a cargo size of 35,000t for its South Korea
- USWC clean freight assessment, rather than the existing 30,000t. This change will result in the discontinuation
of assessment code PA0005183, and its replacement with
PA0008846.
For more information, contact:
• David Ruisard at [email protected] or +1 713 429
6306
• John Demopoulos at [email protected]
or +646 376 6136.
Product change
Affected code IDs
1
PA0006998-99, PA0007741-42,
PA0011936-37, PA0012950-51 ,
PA0013298-99, PA0016579-80,
PA0016584-85, PA0016597, and PA0016910.
2
PA0010073, PA0009019, PA0006261, and
PA0009021.
3
PA0004089-90, PA0004434, PA5000762-64,
and PA5001686.
4
PA0005208, PA0005225, PA0006536,
PA0014667-68, PA0014670, and
PA0016568-69, PA0016638-39
5
PA0002164, PA0016525, PA0003950,
PA0016540
6
PA0005184 and PA0005182
7PA0005185
8PA0005183
Page 24 of 25
Argus US Products
Issue 16-190 | Monday 3 October 2016
Announcements
Argus will last publish Colonial Linden 9.0 RVP 87 conventional
and 93 conventional with cycle 49. Argus will begin publishing
Colonial Linden 11.5 RVP 87 conventional and 93 conventional
with assessment of cycle 49. Argus will last assess 11.5 RVP for
87 conventional on cycle 55 and for 93 conventional on cycle 59.
Assessments for 13.5 RVP 87 conventional will begin with cycle
52 and for 13.5 RVP 93 conventional will begin with cycle 60.
This is a seasonal shift in RVP that follows the Colonial pipeline
schedule. Please contact David Ruisard at [email protected] or 713-429-6306 with questions or comments.
Argus will last publish Colonial Linden 9.0 RVP CBOB with cycle
49. Argus will begin publishing Colonial Linden 11.5RVP CBOB
on cycle 49, and 11.5 RVP CBOB will last be assessed with cycle
55. The assessment for 13.5 RVP CBOB will begin with cycle
52. Please contact David Ruisard at david.ruisard@argusmedia.
com or 713-429-6306 with questions or comments.
Following consultation, Argus is making a change to its Los
Angeles ethanol assessment. Effective 10 October, Argus’ Los
Angeles ethanol assessment will be for product with a carbon
intensity (CI) score of 79.9. The assessment currently reflects
the price of ethanol with a CI score of no more than 90.1. This
change is intended to better reflect current trading practice.
For more information, contact Zander Capozzola at zander.
[email protected] or 713-429-6332.
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Petroleum
illuminating the markets
Licensed to: Cortney Becker, Argus Media Inc (New York)
Issue Ref: 164653
Publisher
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