April 21, 2016 [OPIS] - A large rare Indian cargo of 90,000 tons or 675,000 bbl of ultra-low-sulfur diesel is heading to New York Harbor, industry sources told OPIS on Wednesday.
Minerva Pisces, a Long Range 2 tanker, loaded with Indian ULSD is expected to arrive in New York Harbor on April 26, and the ship is chartered by Koch. However, the cargo had changed hands a few times, ending with Hartree Partners selling or planning to sell it to some tank holders at IMTT terminal in Bayonne, N.J.
While the U.S. is filled up to the gills with gasoline supplies, distillates stocks have been falling in line with the weak front-month price spread for NYMEX ULSD.
ULSD stocks in the Northeast and Mid-Atlantic are sharply lower than earlier this year, and IMTT terminal and other terminals have ample tanks for storage. Buyers of the Indian ULSD cargo are expected to sell cash ULSD at a price premium for barge and offline barrels and take delivery of ULSD on the NYMEX screen at a lower price.
This allows players to lock in that price spread between the cash and paper markets. These players could do a pump-over in May at IMTT terminal, which is a NYMEX delivery point.
“Players will be happy to take sell barrels in barge, offline and tank transfers in a slightly backwardated cash market, and take delivery of IMTT/screen barrels in a contango,” a trader said.
