Chicago ULSD Basis Weakens as PADD 2 Output at 17mos High


   
   CRANBURY, N.J. (DTN) -- Basis for ultra-low sulfur diesel fuel in Chicago 
markets weakened 50 points Wednesday as stocks increased after regional 
refiners lifted diesel output to the highest production rate in 17 months.

   Energy Information Administration midmorning reported a 100,000 bbl build in 
PADD 2 distillate stocks to a 30.1 million bbl 4-1/2 month high during the 
week-ended on June 11, while up 1.9 million bbl in June. Stocks in PADD 2 
narrowed their deficit against the three-year average by more than half in June 
through the 11th, tightening from an 18% deficit in late May to a 7.9% deficit. 
The increased supply was partly realized by greater output, which averaged 
1.162 million bpd during the week-ended June 11, 10% above the three-year 
average.

   After beginning June at a 9cts premium to July ULSD futures on the New York 
Mercantile Exchange, with the strong basis supported by an allocation on the 
Wolverine Pipeline and limited prompt supply available for sale, values 
weakened late last week on growing stocks. Basis weakened to a discount Monday 
with the move to cycle 3 pipeline scheduling, valued at a 3.5cts futures 
discount for movement on the Badger and West Shore pipelines, while ULSD on the 
Wolverine traded at a 2.75cts futures discount. ULSD basis for the Buckeye 
Complex was pegged at a 2.5cts futures discount.

    

    

   Brian L. Milne, 1.402.255.8020, brian.milne@dtn.com, www.dtn.com.




(c) Copyright 2021 DTN, LLC. All rights reserved.