USGC gasoline bids pull numbers
ULSD at lowest since mid-Feb polar vortex
Muted futures impact
New York — Problems on the Colonial Pipeline, the main conduit of refined products from US Gulf Coast refineries to the US Atlantic Coast and into the New York Harbor, are stranding barrels, pulling down the price of gasoline and diesel on the USGC.
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Register Now"Colonial Pipeline is experiencing network issues impacting the operation of the Colonial Pipeline system. The Colonial technology team is aware and working to restore service as quickly as possible," said the pipeline's notice on the Transport 4 Bulletin system used to communicate with shippers.
According to myriad market sources, both main lines of the 2.5 million b/d refined product pipeline system were impacted, stranding barrels of gasoline, diesel and jet on the USGC.
ULSD drops to polar-vortex levels
Market sources said the price of USGC ULSD was done at June futures minus 5.10 cents/gal in the morning of May 7, the lowest it has been since it was assessed at prompt-month futures minus 5.40 cents/gal on Feb. 12.
The same market was assessed at June futures minus 4.80 cents/gal on May 6.
The fast-moving market had market participants moving quickly to cover positions.
"Little busy with the pipeline price tanking," said one distillate broker.
In the jet market, prompt Colonial Shipping Cycle 29 54 grade was offered at NYMEX June ULSD futures minus 25.75 cents/gal, just above the May 6 assessment of minus 26 cents/gal.
The differential was already at a one-year low May 6 amid record high RVO costs, market sources said, referring to the renewable volume obligation costs mandated under the Environmental Protection Agency's Renewable Fuel Standard.
Gasoline bids pulled
US Gulf Coast CBOB was heard last done at NYMEX June RBOB futures minus 14.50 cents/gal, 25 points below the last close, for deliveries on Cycle 29. The material for deliveries on cycle No. 30 is already 25 points above the prompt cycle.
"My bids have all pulled their numbers ... but I haven't seen any offers yet," a broker said.
Other USGC gasoline markets said they had not seen any new offers yet.
The impact on the futures market was muted. NYMEX refined products crack spreads edged higher following the news. The front-month RBOB crack against ICE Brent was trading around $20.94/b heading toward the close, up from $20.49/b May 6. The front-month ULSD crack was trading around $16/b, up from $15.52/b May 6.
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Colonial Pipeline network problems strand barrels on the USGC, prices sink - S&P Global
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