October 20, 2022 [Reuters] – October-delivery jet fuel fell to 90 cents a gallon under November NYMEX heating oil on Wednesday in the Los Angeles wholesale market, said West Coast market traders.

Part of the reason for the drop from two weeks ago, when October jet fuel was valued at 33 cents a gallon over November heating oil, was the strength on the New York market.

It is not unusual for products in the California markets to fall into negative range as they get close to the end of the trading period on the 23rd of each month. Most often, however, trading in the products stops a few days before the deadline. Yet, jet traded on Tuesday and Wednesday.

“I’m not sure why the refiners are selling it off so hard,” a trader said. “Part of the number is heating oil going up, but now October jet is in contango. So they should be selling November unless they are hitting storage constraints.”

November jet fuel was discounted 18.50 cents below NYMEX December heating oil.

As of Oct. 14, the West Coast has 10.7 million barrels of distillate in storage, down nearly 2 million barrels from the same period a year ago, according to the U.S. Energy Information Administration.

In contrast, October CARBOB gasoline, blended to meet California’s strict environmental standards, was bid at a 10-cent per-gallon discount and offered at five cents over November NYMEX RBOB gasoline.

CARB diesel, made to comply with California’s strict rules, was discounted between 65 cents and 30 cents a gallon from November NYMEX heating.

Both October CARBOB and CARB diesel went untraded on Wednesday, traders said.

Reporting by Erwin Seba

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