Platts reduces maximum incrementability for USAC Buckeye Pipeline jet fuel MOC

Platts, part of S&P Global Commodity Insights, has changed the maximum incrementability for its Market on Close assessment process for US Atlantic Coast Buckeye Pipeline jet fuel back to historically normal levels, with effect from Feb. 16, 2023.

Platts has changed the maximum incrementability for bids and offers published in the MOC process using the eWindow communication tool in the Buckeye Pipeline jet fuel market to a maximum of 25 points/gal (0.25 cent/gal) every 30 seconds, down from the previous maximum of 50 points/gal (0.50 cent/gal) every 15 seconds.

The previous incrementability was implemented on Jan. 26 in response to unprecedented volatility observed at the time in the Buckeye Pipeline jet fuel market.

Following decreased volatility in observed market activity, Platts has now reverted the maximum incrementability for bids and offers published in the MOC process using the eWindow communication tool in the Buckeye Pipeline jet fuel market to historical norms.

This change also brings the maximum incrementability for Buckeye jet fuel back into line with the timing and increment guidelines in other US clean refined products markets.

This decision follows several weeks of close observation of volatility in the Buckeye Pipeline jet fuel market. Since the start of 2023, traded values for USAC Buckeye Pipeline jet fuel differentials fluctuated by approximately 200 cents/gal, with volatility reminiscent of that seen in the second quarter of 2022. Platts announced a similar change in MOC incrementability at this time.

Price spikes seen for the differential in 2023 have coincided with near 10-month lows for stock levels in the area, as well as news of planned work at Phillips 66's 258,299 b/d Bayway refinery in Linden, New Jersey. Consistent allocation notices for Colonial Pipelines main distillate line, Line 2, have also complicated market fundamentals, with increased interest to ship distillates from the Gulf Coast to the Atlantic Coast. Platts notified the market of the temporary change to incrementability on Jan. 26 in the following subscriber note https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/012623-platts-increases-maximum-incrementability-for-usac-buckeye-pipeline-jet-fuel-moc

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