USGC ULSD Basis Drops to 1-Month Low


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- U.S. Gulf Coast ultra-low sulfur diesel (ULSD) basis 
weakened Tuesday (5/12), falling to its lowest level in nearly a month, as 
strength in New York Harbor futures outpaced gains in the physical market.

   USGC ULSD basis was assessed at an 11.75cts discount to June New York Harbor 
ULSD futures, widening from a prior discount of 7cts, according to DTN Energy 
data.

   It marked the largest discount for USGC ULSD against the NYH benchmark since 
April 16, when basis was assessed at a minus 12cts.

   Friday's weakening of the basis came as NHY ULSD rallied sharply, rising 
more than 14cts on the day to settle at $4.0534 gallon.

   USGC spot ULSD prices were assessed at $3.9343 gallon, indicating Gulf Coast 
values did not keep pace with the strength seen in futures.

   The widening discount suggests recent weakness in basis has been driven more 
by the sharp rally in New York Harbor ULSD futures rather than a sudden 
deterioration in Gulf Coast physical market conditions




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