Midwest Weekly: Group 3 CBOB Up 16%, Leading Broad Rally


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Group 3 CBOB soared 16% on the week to lead Midwest 
spot fuel markets sharply higher as regional stockpiles remained tight despite 
elevated refinery runs.

   Group 3 CBOB in the Midcontinent surged 42.13cts, or 15.72%, on the week to 
average $3.1023 gallon, up from $2.6809 gallon a week ago, DTN data showed.

   PADD 2 cash fuel markets mounted a broad recovery as physical demand 
tightened ahead of the Labor Day holiday weekend and the onset of the Midwest 
agricultural harvest.

   Chicago CBOB rose 18.13cts, or 6.40%, to average $3.0133 gallon. On regional 
pipelines, Buckeye Complex CBOB gained 10.73cts, or 3.72%, to average $2.9933 
gallon, while Wolverine CBOB advanced 16.23cts, or 5.63%, to average $3.0483 
gallon.

   The higher cash gasoline prices also reflected the rollover to October NYMEX 
RBOB futures, and seasonal transition to higher-RVP gasoline specifications in 
the Midwest.

   Distillate cash markets posted double-digit percentage gains across all 
regional distribution networks, underpinned by seasonal agricultural demand 
expectations.

   Group 3 ULSD jumped 50.45cts, or 12.5%, on the week to average $4.5402 
gallon, while Chicago ULSD rallied 51.35cts, or 12.79%, to average $4.5292 
gallon.

   Buckeye Complex ULSD and Wolverine ULSD both surged 50.45cts, or 12.51%, on 
the week to average $4.5372 gallon.

   Aviation fuels matched the upward trajectory across the PADD 2 complex. 
Chicago jet fuel advanced 24.75cts, or 6.82%, to average $3.8742 gallon, while 
Group 3 jet fuel rose 5.75cts, or 1.46%, to average $3.9922 gallon.

   The price surge came even as regional inventories expanded, highlighting 
market concern over forward supply availability ahead of fall maintenance. 
Energy Information Administration data for the week ended August 28 showed PADD 
2 refiners running flat out, with crude input surging 69,000 bpd on the week to 
4.425 million bpd to push regional utilization to 103.5%.

   Despite the heavy processing throughput, Midwest fuel balances remain 
historically tight. Regional distillate stocks rose 200,000 bbl last week to a 
seven-week high of 28.8 million bbl, while motor gasoline inventories added 
100,000 bbl to reach a five-week high of 43.4 million bbl -- still 1.6 million 
bbl below year-ago levels.




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