USGC Jet Fuel Basis Hits 5-Mo Low Tracking ULSD Futures


   USGC Jet Fuel Basis Hits 5-Mo Low Tracking ULSD Futures

   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- The basis of jet fuel at the Houston origin of the 
Colonial pipeline in the Gulf Coast spot market extended its decline Tuesday 
(5/5), falling to a 26.25cts discount to front-month NYMEX ULSD futures, the 
lowest level this year and the weakest since December 15, when it was assessed 
at a 28cts discount.

   The move follows a sharp reversal from last week's strength, with jet fuel 
basis dropping 7.25cts from the prior session, after peaking at a 17cts premium 
to front-month ULSD futures on April 27, then flipping to a 19cts discount at 
the start of the week and continuing lower in subsequent sessions, according to 
DTN Energy data.

   Bids and offers for USGC jet fuel were heard lower on the day, reflecting 
the broader shift in market direction after reaching record levels in late 
March, when basis surged to an all-time high amid strong demand and tight 
supply conditions.

   The decline has come alongside a pullback in ULSD futures, which moved lower 
from a recent high of $4.0986 gallon on April 30 to $4.0565 in Tuesday's trade, 
with both basis and flat price easing following the earlier rally.




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