It's All About Timing for West Coast Gasoline Imports

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(Bloomberg) -- Tankers booked to deliver gasoline into the U.S. West Coast when local barrels were trading at double-digit premiums to Nymex futures are arriving to a transformed market.

The infusion of about 600,000 barrels of fuel could further weaken local spot prices that have already fallen significantly since the cargoes were fixed.

  • Processed July 4: Torm Lilly arrived Portland with about 312,000 barrels of gasoline for Societe General from Musket, Belgium origin; PTI Danube arrived in San Francisco with 291,000 barrels of Carbob from and for Flintlock Blending, Canada origin: data compiled by Bloomberg
  • San Francisco Carbob traded at a 0.5c/gal. premium to Rbob Wednesday night, down from 14.5c/gal. June 2 as cargo departed: data
  • Portland 84 suboctane at 12c/gal. over futures, was ~+40c/gal. when ship left Belgium on April 18
  • Extra supply may help keep San Francisco pump price under $4/gal.
    • Auto club AAA had Bay Area retail at $3.87/gal. to cap week
It's All About Timing for West Coast Gasoline Imports

Although the new supply might weaken local spot prices next week, shippers can reduce risk and protect potential profit by trading swaps in Carbob paper markets, with timing on the swaps deal based on when any ship would be expected to arrive.

©2019 Bloomberg L.P.

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