30 October 2012 17:33 [Source: ICIS news]
LONDON (ICIS)--US tropical storm Sandy is yet to make waves in the European jet kerosene market, as participants wait to see whether the US refineries can get back on line in time to meet demand from the aviation sector, sources said on Tuesday.
An airline buyer said that unless prices in New York Harbour go up significantly and the US is short of product, there will not be the incentive to direct volumes to the US and away from Europe.
“If prices in New York go up, there may be enough pull to redirect product, but we’ll have to wait and see,” the buyer said.
“There should still be enough product coming from the Middle East to supply the needs of Europe.”
The source said the biggest logistics issue was the timing between refineries and pipelines operating again and airlines returning to normal flying capacity.
“The airports should have between three and four days of fuel supplies, but if it takes the refineries two weeks to get up and running we might have a problem," the source said. "It just depends on how quickly demand returns.”
A broker agreed that a slight arbitrage could open between Europe and the US if the US is short as a result of storm damage; however, it was felt the market would balance itself out.
“There is already an indirect impact [on the European market] from the storm, with refiners maximising diesel production, but if there is a price change it should be seen in the market soon,” the broker said.
($1 = €0.78)
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