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 July 11, 2022.

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 cents/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 May 12 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 the same typical levels which were in place before the disruption earlier this year.

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 around three months of revised incrementability managed with on-the-day adjustments between April 1 and May 11 before the temporary change enacted on May 12. 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 in late spring 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 were 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 notified the market of the temporary change to incrementability on May 12 in the following subscriber note: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/051222-platts-increases-maximum-incrementability-for-usac-buckeye-pipeline-jet-fuel-moc

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