US Cash Jet Fuel Basis Mixed, Futures Surge Lifts Prices

    

   OAKHURST, N.J. (DTN) --- East of the Rockies and West Coast spot jet fuel 
prices rose Tuesday afternoon, underpinned by a better than 5.0cts jump by New 
York Mercantile Exchange ULSD futures. Cash basis were mixed across the hubs 
and deal making remained limited to the coasts, with the Gulf reported as the 
most active region.

   On the NYMEX, oil futures rallied as Organization of the Petroleum Countries 
ramped up efforts to rebalance the market with Saudi Arabia saying after the 
meeting Monday in Russia that the kingdom would limit August oil exports to 6.6 
million bpd, 1.0 million bpd below the year prior. Nigeria has agreed to join 
the effort, saying that once its output stabilizes at 1.8 million bpd it would 
stay there while the United Arab Emirates agreed to further reduce production 
in September.

   NYMEX September West Texas Intermediate crude oil jumped $1.55 to settle at 
$47.89 bbl, near a $47.97 six-week spot high. NYMEX August ULSD futures rallied 
5.16cts to settle at $1.5685 gallon while the September contract soared 5.09cts 
to $1.5730 gallons settlement.  

   In the New York Harbor, the cash differential for 54-grade jet fuel weakened 
0.5cts to a 3.25cts discount to August futures, with spot price rallying 
4.66cts to $1.5360 gallon.

   In the Gulf Coast, cycle 43 54-grade jet fuel traded several times at 
discounts to September futures from 9.25cts to 8.5cts, where it ended for a 
0.75cts boost in cash differential. Spot price surged 5.84cts to $1.4880 gallon.

   Group 3 Q-grade tracked futures up over a nickel to $1.4435 gallon, priced 
at a 12.5cts futures discount for prompt Magellan Pipeline delivery. 

   Chicago 51-grade for first cycle August pipeline shipment was assessed at a 
3.5cts discount to September ULSD futures, up 4.11cts from July values a day 
ago to $1.5380 gallon.

   Los Angeles August LAX pipeline jet fuel traded 0.5cts over the September 
ULSD contract, up over 6.0cts to $1.5780 gallon. Spot jet fuel basis in San 
Francisco and Pacific Northwest were assessed on par with the basin.

   In other news, the U.S. Department of Transportation recently fined Frontier 
Airlines, American Airlines, and Delta Air Lines for violating the department's 
airline consumer protection rules.

   DOT fined Frontier Airlines $400,000 for violating the department's 
oversales and disability rules, while American Airlines was fined $250,000 for 
failing to make timely refunds to passengers, and Delta was fined $200,000 for 
filing inaccurate reports to the department.

   Dawn Gallagher, 1.732.531.4451, dawn.gallagher@dtn.com, www.dtn.com. (c) 
2017 DTN. All rights reserved.