SINGAPORE (Reuters) – Emirates National Oil Company (ENOC) has chartered at least one vessel to store jet fuel to ensure supply to airlines in Dubai as pending U.S. sanctions on Iran have cut off its access to feedstocks for producing the aviation fuel, said several industry sources. ENOC has chartered the Suezmax-sized tankers Portman Square and NS Africa for 30 to 60 days with an option to store oil products, according to two shipbrokers. The company will store jet fuel onboard at least one of the vessels, which can store about 100,000 tonnes of jet fuel, two industry sources said. The price difference between current and forward month jet fuel swaps is in a narrow contango, a market structure where the price of a later-dated commodity is higher than the prompt price. That contango is not enough to cover the cost of storing the fuel on ships, making ENOC’s move unusual, said three trade sources. Jet fuel differentials in the Middle East have been trading at low levels due to high refining run rates and weak demand from Europe, one of the sources said. So, ENOC’s demand for fuel to fill the ships could boost the differentials, he added. While… continue reading
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