MARKETWIRE ALERTS
Maria Eugenia Garcia
DTN Energy Editor
MARKETWIRE ALERTS
MarketWire Afternoon News Sept 21:
Updated at 5:30 PM ET
HEADLINES:
-- Chicago CBOB Dips 8cts, Easing from Supply-Driven Rally
-- Chicago ULSD Basis Drops 35cts as Midwest Distillates Ease
-- Halliburton Signs MOUs for Energy Projects in Venezuela
-- Gasoline Leads Rack Market While ULSD Slips
-- Phillips 66 Borger Reports Upset at Sulfur Unit
-- CFTC: WTI Net Longs Dip as Shorts Jump
NEWS
Chicago CBOB Dips 8cts, Easing from Supply-Driven Rally
Chicago CBOB basis slipped 8cts Monday (9/21) to lead modest declines across
PADD 2 gasoline distribution networks as cash differentials consolidated
following last week's rally.
With the decrease, Chicago CBOB basis fell to a 2.50cts gallon discount
against the October NYMEX RBOB contract, DTN market data showed.
Pipeline hubs across the Eastern network showed smaller downward
adjustments, with Buckeye Complex CBOB and Wolverine CBOB basis each slipping
0.50ct to stand at 5cts gallon premiums over the benchmark.
In the Midcontinent, Group 3 CBOB basis bucked the trend, gaining 3cts to a
13cts gallon premium.
Physical weakness mirrored losses in energy futures, where October NYMEX
RBOB decreased $0.0722, or 2.05%, to settle at $3.4554 gallon.
The consolidation in cash markets comes as PADD 2 distribution channels
continue to adjust to operational disruptions at ExxonMobil's 275,000 bpd
Joliet refinery. Downtime at the plant, caused by a weekend power failure and
subsequent secondary pump flooding on Thursday (9/17), cut off significant
gasoline supply into Chicago and surrounding Midwest pipelines.
EIA data showed PADD 2 motor gasoline inventories rose 900,000 bbl during
the week ended Sept. 11 to 44.1 million bbl -- the highest level since late
July -- despite regional refiner crude processing dropping to 4.241 million
bpd. Regional refinery crude utilization slipped 2.6 percentage points on the
week to 99.0%
Chicago ULSD Basis Drops 35cts as Midwest Distillates Ease
Chicago ULSD basis dropped 35cts Monday (9/21) to lead broad losses across
Midwest distillate cash markets as physical differentials pulled back from
gains driven by disruptions at regional refineries, including ExxonMobil's
Joliet.
Chicago ULSD's premium over the October NYMEX ULSD contract narrowed to
30cts gallon with the 35cts decline, DTN price data showed.
Eastern pipeline networks also saw basis levels adjust lower, with Buckeye
Complex ULSD and Wolverine ULSD differentials dropping 26cts each to stand at
39cts gallon premium against the NYMEX benchmark.
In Midcontinent trading, Group 3 ULSD basis edged up 0.25ct to a 3.75cts
gallon premium versus October ULSD.
Regional aviation fuels saw mixed movement across distribution hubs. Chicago
jet fuel basis rose 5cts to 70cts gallon under October futures, while Group 3
jet fuel basis advanced 10cts to 69cts gallon under the benchmark.
The drop in Midwest physical fuel markets aligned with the losses in NYMEX
futures, where October ULSD declined $0.1558, or 3.08%, to settle at $4.9020
gallon.
Last week, Chicago ULSD surged 64.38cts while Chicago jet fuel surged
$1.0668, DTN data showed, after a spate of refinery issues that included a
power outage and flooding at the 275,000 bpd Joliet plant in Channahon,
Illinois.
Operational disruptions threaten regional fuel distribution in the Midwest
as farm machinery and grain delivery trucks require additional diesel to meet
seasonal demand for harvesting. The U.S. Energy Information Administration
reported that PADD 2 distillate and jet fuel stocks each built by 300,000 bbl
to reach a matching 28.8 million bbl for the week ended September 11.
Refiners in the region pulled back crude processing by 108,000 bpd to 4.241
million bpd, trimming PADD 2 refinery utilization 2.6 percentage points to a
still-elevated 99%.
Halliburton Signs MOUs for Energy Projects in Venezuela
Halliburton announced Monday (9/21) the signing of memorandums of
understanding (MOUs) with Eneva and WESCA to support oil and gas development
opportunities in Venezuela.
Halliburton and Brazil's largest private natural gas operator Eneva will
collaborate to identify and pursue development opportunities in Venezuela,
according to a company statement.
Under the agreement with WESCA, Halliburton will support field evaluation
and development planning in Venezuela.
Halliburton did not specify the amount of investment involved in the MOUs.
"These agreements highlight Halliburton's efforts to help customers unlock
value from their assets through technology, collaboration, and execution
excellence," said Francisco Tarazona, senior vice president, Latin America,
Halliburton.
Early September, Chevron announced plans to invest more than $7 billion over
the next five years in Venezuela. The investments are expected to more than
double production to approximately 600,000 bpd compared to 2026 levels.
Gasoline Leads Rack Market While ULSD Slips
Gasoline led U.S. wholesale rack markets Monday (9/21), rising nationally
while ultra-low sulfur diesel (ULSD) edged down as crude oil and
refined-product futures declined on hopes for renewed diplomatic engagement
with Iran.
Nationwide conventional unleaded gasoline rack prices averaged $3.6708
gallon, up 2.11cts from the previous trading session's $3.6497 gallon,
according to DTN data.
ULSD rack prices averaged $5.4580 gallon, down 1.44cts from $5.4724 gallon
in the previous trading session.
The mixed rack performance came as crude oil futures fell for a fourth
consecutive session. NYMEX WTI traded near $96.23 bbl Monday morning, down more
than $4 on the day, as markets weighed prospects for diplomatic discussions
with Iran during this week's United Nations General Assembly.
Downstream futures also declined. Front-month New York Harbor ULSD fell
about 13.67cts to $4.9211 gallon, while RBOB gasoline dropped roughly 3.19cts
to $3.4957 gallon.
Refining margins continued to provide stronger support for distillates
despite the futures pullback. The diesel crack fell about $1.64 but remained
above $110 bbl at $110.48, while the gasoline crack rose $2.78 to around $50.64
bbl.
ULSD racks fell in four of the five PADDs. West Coast values posted the
largest decline, dropping 5.14cts to $5.9030 gallon. Gulf Coast prices fell
2.31cts to $5.3330 gallon, Rocky Mountain values declined 1.40cts to $5.5753
gallon and Midwest ULSD slipped 0.97ct to $5.4603 gallon. East Coast prices
increased 0.72ct to $5.3002 gallon.
PADD 5 maintained the widest ULSD premium to the national average at
44.50cts, while PADD 1 held the largest discount at 15.78cts.
Gasoline racks were mixed regionally despite the higher national average.
West Coast values posted the largest increase, rising 5.46cts to $4.5197
gallon, followed by Gulf Coast prices, which gained 4.51cts to $3.5394 gallon.
East Coast gasoline rose 4.32cts to $3.3965 gallon and Rocky Mountain values
increased 3.03cts to $4.2519 gallon. Midwest prices fell 5.17cts to $3.4724
gallon.
PADD 5 maintained the largest gasoline premium to the national average at
84.89cts, while PADD 1 held the widest discount at 27.43cts.
Phillips 66 Borger Reports Upset at Sulfur Unit
Phillips 66 reported Saturday (9/19) an emissions event at its 149,000 bpd
Borger refinery in Texas following an upset at the facility's Unit 43 Sulfur
Recovery Unit, according to a filing with the Texas Commission on Environmental
Quality (TCEQ).
The event occurred Friday (9/18), with the refinery reporting 501 pounds of
sulfur dioxide emissions from the Unit 43 SRU stack, exceeding the 500-pound
reporting threshold.
Operations personnel took steps to minimize emissions, while Phillips 66
reported an investigation will be conducted to determine the cause of the upset.
Sulfur recovery units process sulfur removed from refinery streams during
the production of low-sulfur fuels, including gasoline, diesel and jet fuel.
The filing did not indicate any impact to refinery production.
The Borger refinery primarily produces gasoline, diesel and jet fuel.
DTN reached out to Phillips 66 for additional details but did not get an
immediate response.
CFTC: WTI Net Longs Dip as Shorts Jump
Money managers slightly reduced their net bullish positioning in NYMEX West
Texas Intermediate (WTI) crude during the week ended September 15, snapping
four consecutive weeks of increases as a sharp build in short positions
outpaced growth in longs.
Noncommercial long positions in WTI held by money managers increased by
21,084 contracts to 371,202 during the reference week, according to weekly
Commitment of Traders data released Friday (9/18) by the Commodity Futures
Trading Commission (CFTC).
Noncommercial short positions jumped by 21,758 contracts to 235,297 during
the same week, the CFTC data showed.
This caused the net noncommercial long position in WTI to edge down by 674
contracts to 135,905. Open interest, meanwhile, rose by 15,853 contracts to
1,955,764.
The positioning changes came during a period of elevated crude prices, with
WTI trading around the $100 bbl level during the reference week. The
front-month contract has since retreated, trading near $97.68 bbl Monday (9/21).
Noncommercial spread positions in WTI fell by 8,772 contracts to 605,061
during the same week.
Total long positions in WTI futures rose by 18,429 contracts to 1,871,466,
while total short positions increased by 17,776 contracts to 1,900,419.
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