New York — US margins got a boost from lower crude prices, while distillate cracks stubbornly remained range-bound as the countdown to IMO 2020 marches forward, an analysis by S&P Global showed Monday.

Falling crude prices have skewed expected impacts of the International Maritime Organization sulfur rule on distillate cracks, as the change to cleaner bunker fuel, which takes effect January 1, 2020, is expected to create demand for lower-sulfur fuels like ULSD.

Crude prices fell last week on concerns of a slowing economy as focus turned to the Trump Administration's ongoing trade war with China. The front-month ICE Brent and NYMEX crude contracts closed out the week ended August 16 down about 20.5% and 16.6%, respectively, from yearly highs reached in April.

The front-month US Gulf Coast ULSD crack to WTI fell to average $20.13/b for the week, down from the $20.76/b the week earlier, Platts data showed. During the same time period, the six-month crack fell to $20.30/b from $20.42/b, while the 12-month crack rose slightly to $21.70/b from $21.63/b.

USWC MARGINS RISE

On the US West Coast, refining margins rose despite a fall in container traffic at the Port of Long Beach in California. Volumes of inbound traffic at the largest US container port dropped 11% quarter on quarter as the Trump Administration escalated its trade war with China.

USWC coking margins for Ecuadorean Napo crude rose to $14.57/b the week, up from the $13.08/b the previous week, according to S&P Platts Analytics data.

USWC margins rose as Napo's discount in relation to WTI fell to minus $2.45/b for the week, compared with the minus $2.24/b discount the week earlier, Platts price assessments showed.

Also helping support a stronger USWC was an uptick in Los Angeles CARB diesel prices to average $1.86/gal for the week, up from the $1.81/b the week earlier.

The slowdown in shipping did not translate into lower ship fuel prices, as 0.1% marine gasoil delivered into the Port of Los Angeles rose to average $79.58/b for the week, compared with the $78.86/b the week earlier, Platts prices show.

Q3 prices of 0.1% marine gasoil prices are averaging $82.80/b, below the Q2 average of $98.03/b.

USAC MARGINS HIGHER, SHIPPING VOLUMES FALL

US Atlantic Coast margins ticked higher last week, aided in part by a pump problem with a crude unit at Monroe Energy's 190,000 b/d, which cut rates to a weekly average of about 175,000 b/d.

USAC Bonny Light cracking margins rose to $8.90/b for the week, up from the $8.76/b the week earlier, according to Platts Analytics margins.

So far in the third quarter, New York Harbor 0.1% marine gasoil prices are averaging $84.80/b, below the Q2 average of $90.80/b, Platts price data shows, despite an increase in shipping into the Port of New York and New Jersey.

June volumes of TEU's, or twenty-foot shipping containers, into PANYNJ rose 5.9% year over year, due in part to increased loaded containers. But exports of loaded containers fell 2% during the time period, and exports of unloaded containers rose 13.9% as trade slowed.

In 2018, China was the top export destination and importer into the Port of New York and New Jersey, according to the port statistics.

-- Janet McGurty, janet.mcgurty@spglobal.com

-- Edited by Jim Levesque, newsdesk@spglobal.com