Midwest Basis Extends Rally After BP Outage
Miguel E. Andujar
DTN Refined Fuels Market Reporter
DAVENPORT, FL (DTN) -- Midwest refined product basis moved higher again
Wednesday (4/29) as the weekend power outage at BP's 440,000-bpd Whiting
Refinery caused tightening across distillate and gasoline markets.
Chicago ULSD basis was assessed at a $1.01 premium to May NYMEX ULSD
futures, rising 37cts on the session, with similar levels seen across the
Buckeye Complex and Wolverine pipeline, according to DTN Energy data.
Chicago CBOB gasoline basis was assessed at a 44cts premium to NYMEX RBOB
futures, 5cts higher on the day and the strongest since Nov. 2, 2022, when it
was assessed at an 80cts premium. Buckeye and Wolverine gasoline basis
reflected similar strength.
Chicago jet fuel basis climbed to an 80cts premium to front-month ULSD
futures, the highest since March 31, when it was assessed at a 95cts premium.
U.S. Energy Information Administration (EIA) data showed Midwest gasoline
inventories fell by 2.2 million bbl to 52.4 million bbl during the week ended
April 24. That was below the 53.6 million bbl recorded in the same week last
year, marking the lowest stock level since December. Distillate fuel oil
inventories declined by 1.5 million bbl to 27.0 million bbl, while jet fuel
inventories rose slightly by 100,000 bbl to 7.4 million bbl.
That was before a weekend brief power outage at the Whiting plant, which
triggered flaring and the shutdown of a processing at the largest refinery in
the U.S. Midwest.
"Some of the inventory data points to tighter balances than expected, but
this move is more about prompt uncertainty," a source familiar with Midwest
refined product trading said. "You've got buyers that need barrels now, and
that's what's driving these kinds of levels."
The continued strength across Midwest basis reflects tight near-term
conditions, with prompt demand and supply uncertainty in the wake of the
Whiting disruption.
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