MARKETWIRE ALERTS
Barani Krishnan
DTN Refined Fuels Market Reporter
MARKETWIRE ALERTS
MarketWire Afternoon News Sept 18:
Updated at 5:00 PM ET
HEADLINES:
-- USWC: SF CARBOB Jumps 26cts to Highest Since May 2025
-- Midwest Weekly: Chicago Jet Fuel Up 26% Amid Joliet Outage
-- USWC Weekly: Diesel Rises as Portland Gasoline Falls
-- USGC Weekly: Jet Fuel Jumps 9% as Stocks Plunge
-- NYH Weekly: ULSD Climbs 6% as Stocks Stay Tight
-- AAR: Petroleum Carloads Up 6.5% for Week Ended Sept 12
-- Baker Hughes: Weekly North America Rigs Down by 6 to 79
-- Analysis: Perfect Time to Be an Oil Refiner?
-- EIA: Diesel Price Highs Spurred by Outages, U.S. Exports
-- U.S. Rack Markets Diverge; ULSD Falls 6.96cts
NEWS
USWC: SF CARBOB Jumps 26cts to Highest Since May 2025
U.S. West Coast gasoline basis strengthened Friday (9/18), with California
CARBOB reaching multi-month highs as the market rolled its benchmark to
November NYMEX RBOB futures.
San Francisco CARBOB Regular was heard traded at a $1.08 premium to November
NYMEX RBOB futures, up 26cts from the previous session.
It was also the highest differential for San Francisco CARBOB since May 5,
2025, when it traded at a $1.20 premium to the then front NYMEX gasoline
futures contract, DTN Energy data showed.
Elsewhere on the West Coast, Los Angeles CARBOB Regular was assessed at a
71cts premium to November RBOB, up 4cts from the previous session and the
highest since November 3, 2025, when it traded at an 82cts premium.
Portland suboctane gasoline was assessed at merchandise-level basis as the
market rolled from October to November NYMEX RBOB futures.
The RBOB futures curve remains in backwardation, with November trading below
October, mechanically increasing the basis differential as the benchmark shifts
to the lower-priced futures contract.
Midwest Weekly: Chicago Jet Fuel Up 26% Amid Joliet Outage
Chicago jet fuel surged over 26% on the week to lead Midwest spot fuel
markets sharply higher as regional supply tightness intensified following
operational disruptions at ExxonMobil's Joliet refinery.
Chicago jet fuel advanced 1.0668, or 26.28%, on the week to average $5.1260
gallon, up from $4.0592 gallon a week ago, DTN data showed. In the
Midcontinent, Group 3 jet fuel gained 21.38cts, or 5.25%, to average $4.2830
gallon.
PADD 2 cash gasoline markets mounted a double-digit recovery across regional
pipeline distribution networks. Buckeye Complex CBOB led gasoline gains,
surging 47.71cts, or 14.92%, to average $3.6737 gallon, while Wolverine CBOB
advanced 46.18cts, or 14.17%, to average $3.7215 gallon.
Chicago CBOB rose 42.71cts, or 13.20%, to average $3.6617 gallon. In the
Midcontinent, Group 3 CBOB gained 16.61cts, or 4.88%, on the week to average
$3.5667 gallon.
Distillate cash markets posted sharp double-digit percentage gains across
all regional distribution hubs, driven by spot-market cover buying and seasonal
harvest demand expectations.
Chicago ULSD surged 64.38cts, or 13.59%, on the week to average $5.3830
gallon. Buckeye Complex ULSD jumped 62.78cts, or 13.21%, to average $5.3810
gallon, while Wolverine ULSD advanced 63.78cts, or 13.42%, to average $5.3910
gallon.
In the Plains, Group 3 ULSD rallied 40.01cts, or 8.51%, on the week to
average $5.1030 gallon.
Much of the week's rally was attributed to troubles at the Joliet refinery
in Channahon, Illinois, where floodwaters overwhelmed a pump Thursday (9/17)
after a weekend power outage that triggered a site shutdown and safety flaring.
The Joliet complex processes heavy Canadian crude oil to produce
transportation fuels distributed across Midwest markets. Downtime there
complicates refined output in a region already stressed by the start of the
fall harvesting season requiring more diesel for farm machinery and grains
trucking.
The broad price gains also came as PADD 2 refiners ran near full capacity
ahead of fall maintenance schedules.
Midwest refinery utilization slipped to 99.0% during the week ended
September 11. versus the prior week's 101.6%, while remaining well above the
year-ago level of 93.1%, the U.S. Energy Information Administration (EIA)
reported.
PADD 2 refiners' use of crude fell to 4.241 million bpd during the profiled
week, versus 4.349 million the week prior and 3.957 million a year ago, EIA
data showed.
USWC Weekly: Diesel Rises as Portland Gasoline Falls
U.S. West Coast diesel and jet fuel spot prices strengthened during the week
ended September 18, while gasoline markets diverged as Los Angeles and San
Francisco CARBOB rose but Portland sub-octane declined.
Portland ULSD recorded the largest diesel increase, rising 33.15cts, or
6.29%, to a weekly average of $5.6017 gallon. San Francisco ULSD increased
27.85cts, or 5.23%, to $5.6017 gallon, while Los Angeles ULSD rose 24.10cts, or
4.74%, to $5.3262 gallon.
The Energy Information Administration reported Wednesday (9/16) that PADD 5
distillate inventories increased by 371,000 bbl to 10.4 million bbl during the
week ended September 11.
Jet fuel prices also strengthened across all three West Coast hubs. Los
Angeles, San Francisco and Portland jet fuel each increased 30.80cts, or 7.54%,
to average $4.3952 gallon.
PADD 5 jet fuel inventories edged up by 96,000 bbl to 11.3 million bbl from
11.2 million bbl the previous week.
Gasoline prices were mixed. Los Angeles CARBOB increased 24.32cts, or 6.24%,
to average $4.1388 gallon, while San Francisco CARBOB rose 26.72cts, or 6.61%,
to $4.3068 gallon.
Portland sub-octane gasoline bucked the regional trend, falling 15.48cts, or
4.26%, to average $3.4768 gallon. The decline came ahead of Portland's seasonal
transition to 11.5 RVP gasoline beginning September 19.
PADD 5 gasoline inventories increased by 316,000 bbl to 27.4 million bbl,
ending four consecutive weekly declines. Regional crude oil stocks rose by
about 1 million bbl to 46 million bbl.
West Coast refinery utilization increased 1.7% to 94.9% from 93.2%, even as
crude oil inputs edged down by 19,000 bpd to 2.053 million bpd.
West Coast refining operations remained relatively steady during the week,
with no major outages or other production disruptions reported across the
region.
USGC Weekly: Jet Fuel Jumps 9% as Stocks Plunge
U.S. Gulf Coast jet fuel spot prices jumped more than 9% during the week
ended September 18 as regional inventories dropped by more than 1.5 million
bbl. ULSD and CBOB also posted strong weekly increases despite builds in
regional distillate and gasoline inventories.
Jet fuel averaged $4.7458 gallon, rising 40.17cts, or 9.25%, from the
previous week. The weekly average was more than double the $2.1014 gallon
recorded during the comparable week in 2025, DTN data showed.
The Energy Information Administration reported Wednesday (9/16) that PADD 3
jet fuel inventories dropped by 1.5 million bbl to 14.1 million bbl during the
week ended September 11, the lowest level since April 10.
ULSD averaged $5.0990 gallon, increasing 32.00cts, or 6.70%, from the
previous week. Prices were more than double the $2.2389 gallon recorded during
the comparable week in 2025.
The increase came despite PADD 3 distillate inventories rising by 1.2
million bbl to 43.8 million bbl from 42.5 million bbl the previous week.
CBOB regular increased 21.39cts, or 6.54%, to average $3.4841 gallon. The
weekly average stood 80.93% above the $1.9257 gallon recorded during the
comparable week in 2025.
Gulf Coast gasoline inventories added 304,000 bbl to 77.6 million bbl from
77.3 million bbl the previous week.
PADD 3 refinery utilization fell 1.4% to 96.9% from 98.3%, while crude oil
inputs declined by 108,000 bpd to 9.622 million bpd. Despite the weekly
decline, regional refineries continued operating at historically high rates.
No significant Gulf Coast refinery disruptions affecting regional
refined-product supplies were reported during the week.
NYH Weekly: ULSD Climbs 6% as Stocks Stay Tight
New York Harbor ULSD and jet fuel spot prices climbed nearly 6% during the
week ended September 18 as East Coast distillate inventories remained near
historically low levels. CBOB regular posted a more modest increase during a
week that included the transition to higher-RVP fall gasoline.
ULSD averaged $5.1487 gallon, rising 29.65cts, or 6.11%, from the previous
week. The weekly average was more than double the $2.2964 gallon recorded
during the comparable week in 2025, up $2.8523 gallon, or 124.2%, DTN data
showed.
The Energy Information Administration reported Wednesday (9/16) that PADD 1
distillate inventories edged down by 118,000 bbl to 21.6 million bbl during the
week ended September 11. Stocks remained only 2.3 million bbl above the
all-time low of 19.3 million bbl reached two weeks earlier. Distillate imports
fell to 76,000 bpd from 149,000 bpd.
Jet fuel averaged $4.8024 gallon, increasing 26.47cts, or 5.83%, from the
previous week. The weekly average was more than double the $2.1814 gallon
recorded during the comparable week in 2025, up $2.6210 gallon, or 120.15%.
PADD 1 jet fuel inventories increased by 488,000 bbl to 11.2 million bbl
from 10.7 million bbl the previous week, EIA data showed.
CBOB regular edged up 3.90cts, or 1.10%, to average $3.5982 gallon. The
weekly average was 79.85% above the $2.0007 gallon recorded during the
comparable week in 2025.
The relatively small gasoline increase came during the seasonal transition
in New York Harbor to 12.9 RVP gasoline from 7.8 RVP beginning September 16.
PADD 1 gasoline inventories fell by 694,000 bbl to 52.3 million bbl from 53
million bbl the previous week.
East Coast crude oil inventories fell by 193,000 bbl to 8.2 million bbl.
Refinery utilization increased 2.4% to 87.7% from 85.3%, while crude oil inputs
rose by 14,000 bpd to 803,000 bpd.
No significant refinery disruptions affecting New York Harbor supplies were
reported during the week.
AAR: Petroleum Carloads Up 6.5% for Week Ended Sept 12
The Association of American Railroads (AAR) reports that petroleum and
petroleum product carloads totaled 10,901 during the week ended September 12,
up 6.5% from the same week a year ago.
AAR: Weekly U.S. Rail Traffic:
September 12, 2026
Year-To-Date
Cars Y/Y change
(%) Cumulative Y/Y change (%)
Total Carloads 223,560 -3.3%
8,209,888 2.7%
Petroleum and Products 10,901 6.5%
397,568 7.5%
Total Intermodal Units 271,305 -4.1%
10,175,630 4.0%
Total Traffic 494,865 -3.7%
18,385,518 3.4%
Baker Hughes: Weekly North America Rigs Down by 6 to 79
North American energy drilling activity fell by six rigs to reach 792 in the
current week, Baker Hughes' weekly rotary rigs report released Friday (9/18)
showed.
Year on year, combined rigs for Canada and the United States were up 61 from
the 731 units active in the exact same week of 2025, according to the report.
This week's net decline was driven by Canada dropping 10 rigs to 197, while
the U.S. added four rigs to reach 595.
Oil-directed U.S. rigs rose by two to 452, while gas-directed drilling
numbers also increased by two to stand at 134. Miscellaneous rigs in the
domestic market were unchanged to stay at nine.
By trajectory, U.S. horizontal rigs increased by six to 542, vertical units
fell by one to 11, and directional rigs declined by two to 41.
Analysis: Perfect Time to Be an Oil Refiner?
Reduced global refining capacity, disruptions in Russia and the Middle East
and rising demand for domestic fuel exports have led to record margins for U.S.
refiners, suggesting there could not be a better time for the industry.
Tightening supplies of diesel, gasoline and jet fuel indicate that refiner
fortunes could only get better.
The evidence is already overwhelming. The average U.S. 3-2-1 refining crack
spread stood at $65.77 bbl Thursday (9/17), more than double its comparable
2025 level, according to DTN market data. That benchmark hit a record $75.31
bbl on August 28.
"Crack spreads are roughly twice as high as before the Iran war, for some
products almost three times as high," noted DTN analyst Karim Bastati. "Soaring
tanker rates have somewhat cut into margins, but for U.S. refiners, they make
up only a small fraction of total input costs."
Of the 3-2-1 crack, margins for diesel and heating oil, which account for
roughly one-third of a barrel's output, have demonstrated the strongest
performance. The NYMEX ultra-low sulfur diesel (ULSD) crack against West Texas
Intermediate (WTI) crude stood at $111.63 bbl Thursday after touching a record
$117.92 bbl Wednesday (9/16). Year-to-date, the ULSD crack has more than
doubled to average $68.82 bbl.
The performance highlights an unusual point in refinery economics: the
premium for converting a barrel of WTI into diesel has become greater than the
value of the raw crude barrel itself.
Refining capacity and finished fuel availability have become separate market
constraints. That dynamic is reinforced each time WTI futures fall while diesel
and other refined products hold steady or rise.
Gasoline, which accounts for the largest volume of a refined barrel, has
also seen higher margins. The RBOB-WTI crack stood at $42.84 bbl Thursday,
averaging $38.89 bbl year-to-date compared with $21.60 bbl in 2025.
Jet fuel has tracked the same trajectory. The U.S. Gulf Coast jet crack
reached $89.04 bbl Thursday, after hitting $104.38 bbl Wednesday. The metric
has averaged $58.62 bbl so far this year, more than double its 2025 pace, as
the Gulf Coast feeds both domestic demand and international markets.
"Refiners have been making the most of their limited wiggle room," said
Bastati, observing that as U.S. jet fuel production tapers from record highs
due to the war's impact on commercial aviation, diesel has re-emerged as the
"cash cow" as focus returns to maximizing middle distillate yields.
The margin strength across fuels comes as U.S. refiners run at near maximum
capacity. National utilization held near 97% during the week ended September
11, with gross crude inputs above 17 million bpd, U.S. Energy Information
Administration (EIA) data showed.
Limited Capacity
Those familiar with the workings of the industry expect refiners to try and
squeeze more diesel out of their plants in the coming months, although there
are limits to what can be achieved.
"It is unlikely to see the nationwide utilization going above 100% in 4Q as
there is scheduled maintenance that must be done," even if those turnarounds
are deferred, Andy Lipow, president at Lipow Oil Associates in Houston, told
DTN.
Market response has also been limited by a drop in domestic refining
capacity. U.S. operable crude distillation capacity totaled 18.2 million bpd
at the start of 2026, down more than 250,000 bpd year-over-year with the
closure of LyondellBasell's Houston, Phillips 66's Los Angeles, and Valero's
Benicia refineries.
"In some cases, refineries are able and have made relatively small
investments to incrementally increase their throughput capacity," Lipow noted.
"However, if one wanted to add hundreds of thousands of barrels per day of
capacity, one is looking at new refinery construction."
Supportive Outages
Global throughput has suffered similar constraints. Middle East conflict and
drone strikes targeting six major Russian refineries, which account for half of
Russia's diesel output, have choked off international middle distillate flows.
The loss of Russian and Middle Eastern supply has been critical for Europe,
which increased its reliance on imported fuels following 2023 sanctions. That
structural shift has pulled heavily on U.S. fuel supplies at the same time
domestic capacity has shrunk.
EIA data show that U.S. distillate exports averaged a record 1.56 million
bpd in Q2, some 30% above the five-year average, while jet fuel exports more
than doubled to 356,000 bpd. Overseas demand remained robust into September,
with four-week average distillate exports hovering at 1.674 million bpd.
EIA: Diesel Price Highs Spurred by Outages, U.S. Exports
Global production outages and tight inventories are keeping prices of diesel
and refining margins for the product higher across the United States, the U.S.
Energy Information Administration noted Friday (9/18).
U.S. retail diesel prices averaged $6.29 per gallon during the week ended
September 14, their highest since 2022 on an inflation-adjusted basis as well
as a record since the agency began publishing the data in 1994.
Separately, DTN data showed the crack, or profit margin, for diesel at above
$110 bbl for a fourth consecutive session on Friday, while a barrel of West
Texas Intermediate crude was lower at around $102.
"Reduced distillate production abroad has caused international prices to
increase, driving up both the cost to import diesel to the United States and
increasing demand for diesel exports from the United States," the EIA said in
its analysis.
Refining disruptions across Russia, China, and the Middle East have choked
off regional product supplies, forcing international buyers to compete heavily
for U.S. fuel exports while simultaneously driving down U.S. waterborne
imports, the agency added.
Domestic refiners have responded to the squeeze by operating near peak
capacity, keeping utilization rates as high as 97% during the latest week ended
September 11, the EIA found.
The higher refinery runs have helped U.S. distillate production an average
of 5.1 million bpd between January and August, the highest since 2019.
U.S. Rack Markets Diverge; ULSD Falls 6.96cts
U.S. wholesale rack markets diverged Friday (9/18), with conventional
gasoline prices rising while ultra-low sulfur diesel (ULSD) fell nationally as
product futures and refining margins sent mixed signals into the physical
market.
Nationwide conventional unleaded gasoline rack prices averaged $3.5814
gallon, up 3.38cts from Thursday's $3.5476 gallon, according to DTN data.
ULSD rack prices averaged $5.4840 gallon, down 6.96cts from the previous
trading session's $5.5536 gallon.
The mixed rack performance came as crude and product futures remained
volatile. NYMEX WTI traded near $103.07 bbl Friday morning, up $1.16 on the day
after reaching a session high of $103.39 bbl. Front-month New York Harbor ULSD
rose 4.23cts to $5.1564 gallon after trading as high as $5.1710 gallon, while
RBOB gasoline fell 2.80cts to around $3.48 gallon.
Refining margins remained especially strong for distillates. The diesel
crack traded above $110 bbl for a fourth consecutive session, near $114 bbl and
up about $1.13 on the day. The gasoline crack weakened to around $43.35 bbl,
down about $2.10.
ULSD racks fell in four of the five PADDs. West Coast values posted the
largest decline, falling 15.42cts to $5.9544 gallon, followed by Midwest
prices, which dropped 13.62cts to $5.4700 gallon. Rocky Mountain ULSD fell
6.82cts to $5.5892 gallon and Gulf Coast values declined 3.08cts to $5.3562
gallon, while East Coast prices were nearly unchanged at $5.3303 gallon.
Midwest ULSD racks posted one of the largest regional declines despite an
operational disruption in Illinois. ExxonMobil on Thursday reported an oil
release at its 275,000 bpd Joliet refinery in Channahon, Illinois, after
floodwater overwhelmed a pump. The refinery supplies gasoline and diesel into
Chicago and broader Midwest markets and represents more than 6% of regional
refining capacity, making any prolonged operational disruption relevant to PADD
2 supply conditions.
PADD 5 maintained the widest ULSD premium to the national average at
47.04cts, while PADD 1 held the largest discount at 15.37cts.
Gasoline racks moved higher across all five PADDs. Midwest values posted the
largest increase, rising 7.02cts to $3.5067 gallon, followed by East Coast
prices, which gained 2.65cts to $3.3533 gallon. West Coast gasoline rose
2.31cts to $4.2431 gallon, Gulf Coast values increased 1.60cts to $3.3928
gallon and Rocky Mountain prices added 1.34cts to $4.1200 gallon.
PADD 5 maintained the largest gasoline premium to the national average at
66.17cts, while PADD 1 held the widest discount at 22.81cts.
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