JET: The European jet market coasted to the end of the week with very little impetus evident and moves on ICE gasoil contracts the defining factor in flat price direction. Traders continued to voice expectations that some of the volumes held on floating storage had been cleared. "Supply has dried up and it's looking slightly more constructive," one trader said, with a second seeing only term volumes flowing from the Middle East. "For a few months the arb was definitely shut," but Europe remained the best bet for surplus volumes. "Out of all the possible destinations, it's the least painful," the second source summarized, although the quantities emanating from the region were .

However, expectations of length clearing were tempered by other traders, who saw the volumes that have been emptied from tank simply retaken into fresh floating storage fixtures. "A lot of volume has been released from floating storage, but it has not been consumed...Nothing is really coming off the water and we are projecting stock builds in November, so the level on floating storage will increase," a third trader said. For the moment, however, cargo premiums continued to respond to less availability, firming $1/mt to reach $44.75/mt. Barge premiums also edged closer to parity, narrowing the gap to 0.25 cents/mt.

In industry news, Air France became the fifth airline to commence operations with the giant A380 Airbus Friday, in the process becoming the first European and the first to use the double-decker on a trans-Atlantic route. The giant 538 passenger capacity offered by the 12 aircraft the airline is adding to its fleet enables it to consolidate some of its trans-Atlantic routes. Virgin Atlantic also weighed in to the debate on the UK's increased passenger duty, which comes into force from Sunday and categorizes duty according to distance travelled, by calling on the current opposition party to undo the change. The UK is expected to undergo elections in May, 2010.

In the Platts Market on Close assessment process, Vitol reached November plus $45/mt on mid-window dates, while Shell had a floating offer on broadly similar dates. No deals were reported.

3-Nov-09