September 1, 2017 / 10:30 AM / 2 years ago

Storm Harvey opens up rare jet fuel exports from Europe to U.S.

LONDON (Reuters) - Traders are shipping jet fuel from Europe to the United States, where Tropical Storm Harvey has sparked concern over possible shortages of the aviation fuel.

A pipe transporting jet fuel offloaded from barges in seen at Kinder Morgan's Westridge Terminal on Burrard Inlet in Burnaby, British Columbia, Canada November 18, 2016. REUTERS/Chris Helgren

French oil major Total (TOTF.PA) has booked the Maersk Misumi and Butterfly to load 37,000 tonnes each of jet fuel in Europe in the coming two weeks for transatlantic transportation, shipping reports showed.

Total also has a provisional booking of the Seaways Alcmar to load 37,000 tonnes of jet fuel in Malta on Sept. 4, with delivery options to the U.S. Gulf or U.S. Atlantic Coast.

Royal Dutch Shell (RDSa.L) and other traders were also seeking tankers along the route, traders and ship brokers said.

“Everyone seems to be very busy trying to find cargoes and ships to move across the pond,” one European jet fuel broker said.

The United States is usually a jet fuel exporter to Europe, which also relies on imports from Asia Pacific and the Middle East to meet demand.

About 4.4 million barrels of daily U.S. refining capacity have been shut by Harvey, including the country’s largest refiner, Motiva Port Arthur.

The shut-ins account for nearly a quarter of U.S. refining capacity, close to Japan’s daily consumption.

The exports are expected to boost European prices in both physical and paper markets, but the impact on supplies will be tempered by the approaching end of Europe’s summer season, in which demand spikes.

European jet fuel refining margins, the profit that refiners can theoretically make from processing crude into jet fuel, stand at a two-year high of more than $16 a barrel, Reuters calculations show. That is nearly double the level in early September last year.

Traders are also scrambling to buy other refined products from around the world to move to the United States to cover supply shortages.

Editing by David Goodman

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