Chicago jet fuel spiked 5.25 cents Monday and 10.25 cents over two trading days as participants seek out on-spec barrels in the spot market that has the highest jet fuel prices in the world.
S&P Global Platts assessed Chicago jet at NYMEX August ULSD futures plus 20.50 cents/gal for an outright price of $1.5828/gal, or $66.48/b.
"There have been some issues up there with jet, Explorer issues," one trader said. "So yes, it's been strong."
Explorer Pipeline earlier this month canceled its 39th shipping cycle taking jet fuel from the Gulf Coast to Chicago because it could not clean out fuel already in tank. While Explorer cited no room at some terminals and tanks for jet storage, other sources said the fuel was unable to pass jet fuel thermal oxidation tester (JFTOT) thermal stability standards.
A second trading source said the Shell Des Plaines terminal that takes fuel from the East Chicago line or from Explorer farther into the region, including O'Hare International Airport, is "working feverishly" to resolve off-spec issues through filtering and additives. He said O'Hare is still supplied by two terminals that are on-spec and providing adequate supply.
Explorer sends jet fuel up every other cycle, with the 41st cycle likely to arrive next week with resupply, sources said.
Group 3 out of Oklahoma and Los Angeles jet are the next highest US differentials, both at minus 3.50 cents/gal. In the Atlantic Coast, differentials rose 1.25 cents to minus 7 cents/gal for Buckeye Pipeline and New York barges, while the Gulf Coast rose 25 points to minus 13 cents/gal.
