MARKETWIRE ALERTS
MARKETWIRE ALERTS
MarketWire Afternoon News June 22nd:
Updated at 5:30 PM ET
HEADLINES:
--Group 3 Jet Basis Up, Chicago Steady as NYMEX ULSD Rises
--Analysis: Easing Supply Risks Reverse Midwest Fuel Spring Rally
--ExxonMobil Sets July 1 for Domicile Shift from NJ to Texas
--TotalEnergies Port Arthur Refinery Shuts for 6 days
--U.S. Treasury Grants 60-Day Sanctions Waiver on Iran Oil
--ExxonMobil Baytown Refinery Reports CLEU Emissions Event
NEWS:
Group 3 Jet Basis Up, Chicago Steady as NYMEX ULSD Rises
Group 3 jet fuel differentials surged by double digits on Monday (6/22),
rebounding from last week's oversold position amid a futures prices decline. In
contrast, Group 3 ultra-low sulfur diesel (ULSD) spot basis weakened amid
expanding regional distillate supplies.
Group 3 jet fuel was talked at a discount of 45cts to the July NYMEX ULSD
contract, strengthening by 10cts on the day. Meanwhile, Chicago jet fuel values
held flat at a 55cts discount to the July NYMEX ULSD futures contract -- the
level last seen on Thursday (6/18).
The bounce in Group 3 jet fuel corrects a portion of last week's sharp
selloff, when it tumbled 18.84cts to a weekly average of $2.5926 gallon. That
previous decline occurred as regional jet fuel inventories climbed by 700,000
bbl to 8.1 million bbl, leaving stocks roughly 700,000 bbl above year-ago
levels.
Group 3 ULSD was talked at a discount of 19.25cts to the July NYMEX ULSD
contract, weakening by 4.5cts on the day. Chicago ULSD, in line with jet fuel,
was unchanged at Thursday's discount of 20cts to the same futures benchmark.
The weaker Group 3 spot market reflected a broader regional slide
established last week, when Group 3 ULSD values plummeted 25.89cts to a weekly
average of $3.0721 gallon amid a steady buildup in product availability.
The mixed spot market follows a prolonged downward trend across Midwest fuel
markets driven by expanding regional product supplies and macroeconomic
pressure from the newly finalized U.S.-Iran peace deal.
Distillate fuel oil inventories in PADD 2 expanded by 1 million bbl during
the week ended June 12, positioning regional stocks 1.2 million bbl above
year-ago levels of 25.1 million bbl, the U.S. Energy Information Administration
reported last week.
Analysis: Easing Supply Risks Reverse Midwest Fuel Spring Rally
The historic supply squeeze that gripped the U.S. Midwest fuels market
through much of the spring is rapidly unwinding as refinery operations
stabilize and the Iran war risk-related premiums evaporates.
Just weeks ago, the PADD 2 region was contending with a combination of
localized refinery outages, tight regional inventories and concerns that
escalating tensions between the United States and Iran could create additional
logistical strain.
As of Monday (6/22), the Midwest market found itself moving in the opposite
direction, apparently as fears of broader supply disruptions receded.
The reversal was more evident on Buckeye and Wolverine pipeline systems.
Ultra-low sulfur diesel (ULSD) basis at those pipelines plummeted by a massive
24cts to trade at a deep 14cts discount to July NYMEX ULSD futures contract,
respectively, in a single day. On a weekly basis, Wolverine and Buckeye ULSD
spot prices both fell just over 33cts, averaging nearly $3.08 gallon.
Chicago diesel mirrored the hefty contraction, dropping nearly 32cts to a
weekly average of $3.05 gallon. Group 3 spot prices similarly slid almost 26cts
to settle at around $3.07 gallon, reinforcing a retreat from spring premiums.
Macro-Micro Relief
The primary catalyst behind the reset is a bearish convergence of macro and
micro fundamentals.
On the global stage, an interim peace framework in Switzerland has
successfully triggered a rapid liquidation of the Iran war risk premium. With a
60-day roadmap under temporary U.S. Treasury waivers designed to fully reopen
the Strait of Hormuz, crude benchmarks corrected 30% from April highs, driving
the front-month NYMEX WTI to below $75 bbl and Brent to beneath $78 bbl.
Physical players holding expensive inventory were, consequently, forced to
liquidate, paring length in the cash market as well.
At the same time , logistical bottlenecks across the Midwest began to ease
as refinery operations relatively normalized. A delayed flood of Gulf Coast
pipeline batches was dispatched in the region just as Marathon's Robinson plant
restored full production, while BP's Whiting facility maintained throughput
via contingency crews.
The resulting influx of prompt material was reflected in U.S. Energy
Information Administration (EIA) data showing PADD 2 distillate fuel oil stocks
surging by 1 million bbl for the week ended June 12, marking one of the largest
builds in recent months.
This weekly build elevated regional distillate inventories to 26.3 million
bbl, placing the Midwest at 1.2 million bbl above the volume reported in the
same week a year earlier. Regional jet fuel inventories also rose by 700,000
bbl to 8.1 million bbl, establishing a healthy layer of secondary product
insulation.
The gasoline complex joined the broad-based downward trend, even as the
market operates in the traditional heart of the summer driving season. Chicago
and Group 3 CBOB fell between 5cts and 12cts on the week, completely offsetting
a minor 200,000 bbl weekly inventory build.
Canadian Wildcard
While the immediate operational crisis has passed, a significant structural
wild card has emerged over the weekend regarding long-term regional stability.
White House rhetoric questioning the renewal of the United
States--Mexico--Canada Agreement (USMCA) has introduced a fresh layer of risk
for Midwest refiners.
The region remains fundamentally dependent on landlocked pipeline flows of
heavy Canadian crude, typically in the form of Western Canadian Select (WCS).
Historical EIA data shows WCS volumes to PADD 2 average roughly 2.75 million
bpd. Illinois alone represents the fourth-largest refining state in the
country, importing roughly $45 billion in Canadian crude annually.
Any future tariff or trade disruptions within the USMCA framework could
erode the Midwest's historic raw material cost advantage. While the market
enjoys a temporary reprieve from global shipping volatility, shifts in trade
policy could alter regional margin structures later this year.
ExxonMobil Sets July 1 for Domicile Shift from NJ to Texas
ExxonMobil announced Monday (6/22) the official change in its corporate
domicile from New Jersey to Texas will become effective on July 1.
Following the legal relocation, Texas-based ExxonMobil Holdings will become
the publicly traded parent company of the group, replacing Exxon Mobil
Corporation of New Jersey.
TotalEnergies Port Arthur Refinery Shuts for 6 days
TotalEnergies reported a six-day unplanned shutdown of multiple units at its
238,000 bpd Port Arthur refinery in Texas following a power outage caused by a
lightning strike, according to a filing with the Texas Commission on
Environmental Quality.
The event began with flaring emissions at Areas 1, 2, 3, and 5 on Thursday
(6/18) at 8:25 p.m. and is expected to continue through Friday (6/27) at 8:25
a.m. CT, according to the filing released on Friday (6/19).
Units affected include Atmospheric Crude Unit (ACU) heaters, Vacuum
Distillation Unit (VDU) heaters, the Fluid Catalytic Cracking (FCC) Unit
regenerator, Hydrotreaters, Delayed Coker unit heaters, storage-related
systems, among others.
The event also resulted in emissions of carbon monoxide, sulfur dioxide,
nitrogen oxides, particulate matter, and volatile organic compounds.
The company said refinery personnel were working to restore power and safely
restart operations.
The Port Arthur refinery is a major integrated platform operated by
TotalEnergies USA and processes crude oil to produce a wide range of
transportation fuels, low-sulfur products and petrochemical feedstocks.
DTN reached out to TotalEnergies for additional details but did not get an
immediate response.
U.S. Treasury Grants 60-Day Sanctions Waiver on Iran Oil
The Trump administration has issued a two-month waiver on sanctions on
Iranian oil following an extended ceasefire and peace talks over the Middle
East conflict, the U.S. Treasury announced Monday (6/22).
The temporary 60-day general license issued by the Treasury's Office of
Foreign Assets Control authorizes through August 21 transactions involving
Iranian-origin crude oil, petroleum products and petrochemical products.
Detailing the directive, the Treasury added that it allows the production,
delivery and sale of Iranian energy commodities, including direct importation
into the United States when incidental to licensed activities. Financial
institutions are permitted to process U.S. dollar-denominated payments, while
related services such as shipping, insurance, offloading, and bunkering are
also cleared under the waiver.
The Treasury, however, specified that the waiver explicitly excluded any
transaction involving heavily sanctioned entities from Cuba or North Korea.
The waiver on Iranian oil follows a memorandum of understanding signed last
week between Washington and Tehran during ongoing diplomatic talks in
Switzerland. As part of the preliminary framework, Iran has committed to
maintaining open transit through the Strait of Hormuz and allowing
International Atomic Energy Agency inspectors back into the country.
Crude futures extended their losses on news of the waiver and the growing
prospects for the resumption of flows through Hormuz, which prior to last week
experienced more than 100 days of separate blockades by Iran and the U.S. that
largely froze transit of 20 million bpd of petroleum liquids.
By 10:24 a.m. ET, NYMEX WTI for July delivery was down $1.90 to $74.70 bbl,
versus a four-year high of $119.48 in March. ICE Brent for August slid $2.72 to
$77.85 bbl, compared with its $126.41 peak in April, then its highest since
2022.
ExxonMobil Baytown Refinery Reports CLEU Emissions Event
ExxonMobil has reported an emissions event at the Catalytic Light Ends Unit
3 (CLEU3) and Hydrofining Unit 9 (HU-9) of its 588,000 bpd Baytown Refinery in
Texas, according to a filing with the Texas Commission on Environmental Quality.
The event began Wednesday (6/18) at 7:56 a.m. and was expected to continue
through Thursday (6/19) at 7:56 a.m. CT, according to the filing from the same
day.
Detailing the event, ExxonMobil said unplanned equipment shutdowns resulted
in unit upsets that required safe utilization of the refinery flare system,
triggering emissions to the atmosphere from CLEU equipment.
Reported emissions included propane and ethylene released through multiple
safety relief valves, along with flare emissions that included carbon monoxide,
nitrogen oxides and sulfur dioxide across several refinery flare systems.
The company said timely operational adjustments were made to stabilize
operations and minimize emissions. ExxonMobil added that available information
indicated no adverse environmental impact to the refinery site or surrounding
community. The filing stated the event remained ongoing at the time of
reporting, with minimal impact to production and no expected effect on
contractual commitments.
Prior to Wednesday, ExxonMobil reported an emissions event at Baytown on May
12, when a leak on the inlet duct of a reactor at Unit 3 of the plant resulted
in sulfur dioxide emissions.
The Baytown refinery is the fifth-largest refinery in the United States and
primarily produces gasoline, diesel, and jet fuel.
DTN reached out to ExxonMobil for additional details but did not get an
immediate response.
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