US Gulf Coast diesel hits over one-year high as market prepares for Tropical Storm Zeta

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Highlights

USGC ULSD rises due to Zeta, growing interest in

USAC, USGC jet see rise

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Houston —
The US Coast diesel surged to over a one-year high on Oct. 27, as the region prepared for Zeta.

S&P Global Platts assessed ULSD on the Gulf Coast at the December ULSD futures contract minus 3.55 cents/gal, up 95 points/gal from the previous day. This marks the highest Gulf Coast diesel has been since Oct. 8, 2019, when it was assessed at prompt-month futures minus 2.25 cents/gal.

The storm is expected to make landfall on the Louisiana coast on the evening of Oct. 28, data from the National Hurricane Center showed.

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About half of the US ’s oil and gas volumes offline ahead of Zeta

Sources also said rising interests in diesel exports was another factor for the strengthening Gulf Coast market.

“There were a number of big ULSD cargoes booked for early November loading to ,” one trader said.

Following the Colonial Pipeline onto the Atlantic Coast, offline diesel rose to a 12-day high at November futures plus 2.25 cents/gal. ULSD off the Colonial Pipeline was last seen at this level on Oct. 15.

Jet fuel markets also saw gains ahead of the upcoming hurricane.

USGC jet fuel was assessed at NYMEX December ULSD minus 9.80 cents/gal, up 45 points on the day, and its highest in six sessions. That strength appeared to push into the New York Harbor market.

“I think they are finally getting more aligned,” one trader said of the two markets. “As NYH sellers thin out and returns, they should be dancing to the same beat.”

Jet fuel on Buckeye Pipeline climbed 75 points to be assessed at November futures minus 3.50 cents/gal. That was the highest assessment since it reached futures minus 3 cents/gal on Feb. 19.

Author

Margaret Rogers

  
Joshua Brown

Editor

Derek Sands

Commodity

Oil

Source: Platts

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