SF CARBOB Basis Climbs 5cts on West Coast Supply Woes


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- The basis for regular San Francisco CARBOB strengthened 
Thursday (5/21) to a premium of 54cts gallon to benchmark RBOB futures as lower 
gasoline imports and ongoing Northern California refinery closures tightened 
regional supply expectations ahead of peak summer demand.

   Regular San Francisco CARBOB's basis climbed 5cts on the day, from its prior 
premium of 49cts gallon to the June RBOB contract on NYMEX.

   Premium San Francisco CARBOB, meanwhile, maintained its typical 10cts spread 
over regular CARBOB during the session, which saw heightened activity as the 
market also rolled into a new trading month.

   The higher basis levels came as the U.S. Energy Information Administration 
(EIA) reported that West Coast gasoline inventories slid during the week ended 
May 15. Motor gasoline inventories in the PADD 5 region fell by 400,000 bbl to 
27.9 million bbl during the profiled week, after climbing the week prior.

   While year-over-year gasoline stocks were higher by 800,000 bbl, the weekly 
drop still raised concerns in a market already on the edge over tightening 
supply fundamentals tied to declining imports and reduced California refining 
capacity.

   PADD 5 gasoline imports also fell by 30,000 bpd to 91,000 bpd last week and 
were 150,000 bpd lower compared with the same week last year, reflecting weaker 
inbound supply flows into the West Coast market as summer grade gasoline demand 
continued to build.

   Demand and price outlook for West Coast fuels have risen especially in the 
wake of the Iran war, which has stalled the flow of some 20 million of 
petroleum liquids from the Middle East -- a major source of supply for 
Californian refineries.




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