Platts increases maximum incrementability for USAC Buckeye Pipeline jet fuel MOC

Platts, part of S&P Global Commodity Insights, has increased the maximum incrementability for its Market on Close assessment process for US Atlantic Coast Buckeye Pipeline jet fuel, with effect from May 12, 2022, until further notice, as a result of extreme market volatility observed in recent weeks.

Platts has increased the 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 50 points/gal (0.50 cents/gal) every 15 seconds, up from the previous maximum of 25 points/gal (0.25 cent/gal) every 30 seconds.

All other MOC timing and increment guidelines remain unchanged. There are no changes being made to the timing and increment guidelines in other US refined products markets.

This decision follows over one month of close observation of volatility in the Buckeye Pipeline jet fuel market, with numerous on-the-day adjustments made to incrementability on a case-by-case basis between April 1-May 11. During this period, traded values for USAC Buckeye Pipeline jet fuel differentials fluctuated by approximately 400 cents/gal and established all-time highs, highlighting unprecedented volatility in the market.

Record highs seen for the differential over the past month coincided with an all-time low for jet fuel stocks on the Atlantic Coast, with data from the US Energy Information Administration showing regional volumes fell to a 30-year low in early April. Low stock levels have been exacerbated during this time by limited imports and competing demand for jet fuel at other hubs along the Atlantic Coast and by supply concerns for ultra-low sulfur diesel, exacerbated by the Russia-Ukraine conflict.

Platts is closely monitoring the situation as it develops. Further announcements on resuming more standard incrementability for the MOC in this market will be made in due course.

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