Midwest ULSD Basis Swings on Talk of Refiner Selling


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Chicago ultra-low sulfur diesel (ULSD) erased 85cts 
from its premium to trade at just 5cts gallon above NYMEX June ULSD on Tuesday 
(5/12) on talk that refiners were clearing inventory after holding to them in 
recent days following federal data indicating lower stockpiles.

   On the Wolverine pipeline, the basis for ULSD dropped by 80cts to stand at 
10cts gallon to the NYMEX front-month contract. The Buckeye Complex's ULSD 
differential fell by 70cts to also rest at 10cts gallon to June ULSD.

   The sharp swings in Midwest premiums came days after they reached all-time 
highs on a feared supply squeeze in diesel following lower regional stockpiles 
for ULSD reported by the U.S. Energy Information Administration (EIA). Earlier 
on Tuesday, Chicago ULSD was at a premium of 97.5cts gallon.

   "Refiners are probably selling inventory now that they haven't sold in a 
while," said a regional trader in ULSD.

   The EIA reported on Wednesday (5/6) that distillate fuel oil inventories in 
the Midwest dropped by 1 million bbl to 24.9 million bbl during the week ended 
May 1.

   Despite the weekly decline, PADD 2 distillate balances remained slightly 
above the 24.7 million bbl reported in the same week of the previous year, the 
EIA data showed.

   The basis for Group 3 jet fuel, meanwhile, fell 7cts on the day to stand at 
a discount of 7cts gallon to NYMEX ULSD for June.

   Jet fuel inventories in the Midwest increased by 100,000 bbl to 7.2 million 
bbl and were above the 6.7 million bbl recorded in the same week last year.




(c) Copyright 2026 DTN, LLC. All rights reserved.