LA Jet Fuel Basis Spikes by 30cts


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- The basis for prompt Los Angeles jet fuel strengthened 
further on Thursday (4/23), trading at a $1.10 premium above May NYMEX ULSD 
futures, up by 30cts from where it was last pegged at an 80cts premium on 
Wednesday (4/22) DTN data showed, extending a historic stretch of volatility in 
the West Coast market.
The latest jump follows last week's extraordinary run that pushed Los Angeles 
jet fuel into triple-digit territory for the first time on record. The rally 
began with a 32cts surge on Tuesday (4/14) that lifted the basis to a 75cts 
premium, followed by a 15cts rise on Wednesday (4/15) to a 90cts premium, 
matching levels last seen on November 22, 2023, during the post-pandemic 
recovery in air travel.
Traders continue to cite constrained refinery output as the primary driver. The 
recent shutdown of Phillips 66's 139,000 bpd Los Angeles refinery, combined 
with the planned closure of Valero's 145,000 bpd Benicia refinery, has reduced 
regional production capacity and left buyers competing for limited supply.
While Los Angeles jet fuel prices remain below the post-Covid peak above $7.60 
gallon in early 2022, the current rally reflects a market tightening rapidly 
under supply pressure rather than demand growth, keeping the jet fuel complex 
on a firm footing heading into late April.




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