Group 3 Jet Basis Up, Chicago Steady as NYMEX ULSD Rises


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- 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.

    




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