Chicago Jet Fuel Basis Above 3-Year High


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- Chicago jet fuel basis extended its rally Wednesday 
(4/1), climbing 6cts to a $1.05 premium against May NYMEX ULSD futures, the 
highest in more than three years, as tightening distillate fundamentals and 
persistent strength in Gulf Coast fuels continued to pull Midwest values higher.

   Jet fuel basis in Chicago was last heard at a $1.05 premium to front-month 
ULSD futures in latest trade, up from a 99cts premium the prior session. It was 
the highest difference since January 24, 2023, when it was assessed at a $1.15 
premium, according to DTN Energy data.

   "Liquidity has been thinner in Group 3, so it lagged the move in Chicago," a 
source familiar with Midwest refined product trading said. "But today it 
finally caught up with the broader strength in jet as demand stays elevated. If 
this keeps going, you could see Group 3 tighten toward a 10cts discount by the 
end of the week."

   Group 3 jet fuel followed the move higher, trading at a 25cts discount to 
ULSD futures, narrowing sharply after a 49cts move on the session and marking 
its strongest level since March 10.

   Front-month ULSD futures remained supported by a strong backwardated 
structure, with the prompt contract holding a 33.50cts premium to the second 
month, reinforcing tight near-term supply conditions.

   While distillate crack spreads have eased from recent highs above $90 bbl, 
they remain above $70 bbl, continuing to signal strength across the distillate 
complex.

   Chicago's stronger basis reflects ongoing competition with Gulf Coast 
markets, where barrels remain priced against export economics, forcing inland 
buyers to raise bids to secure supply and keep pace with broader distillate 
strength.




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