MARKETWIRE ALERTS
Barani Krishnan
DTN Refined Fuels Market Reporter
MARKETWIRE ALERTS
MarketWire Afternoon News Sept 4:
Updated at 5:00 PM ET
*MarketWire will be closed on Monday (9/7) in observance of the Labor Day
federal holiday, and will resume coverage on Tuesday (9/8).
SEPT 4 HEADLINES:
-- USWC Weekly: Portland ULSD Rises 19.54% on Week
-- NYH Weekly: ULSD Rises 11% as Stocks Hit All Time Low
-- Midwest Weekly: Group 3 CBOB Up 16%, Leading Broad Rally
-- USGC Weekly: ULSD Spot Price Climbs 10%, Doubles YoY
-- Baker Hughes: Weekly North America Rigs DN by 7 to 792
-- Analysis: Why Venezuelan Oil Alone Can't Fill The SPR Gap
-- EIA: Surging Crack Spreads Elevate U.S. Retail Fuel Costs
-- Marathon Galveston Bay Reports Resid Hydrotreater Leak
-- U.S. August Nonfarm Payroll Up 162,000, Jobless Rate Steady
-- U.S. August Nonfarm Payroll Up 162,000, Jobless Rate Steady
NEWS
Baker Hughes: Weekly North America Rigs DN by 7 to 792
North American energy drilling activity contracted this week, Baker Hughes
weekly rotary rigs report released Friday (9/4) showed, with the regional count
falling by seven to 792.
Year on year, rigs for Canada and the United States combined were up 74 from
the 718 actively deployed in the exact same week of 2025.
The present week's lower numbers were driven entirely by Canadian activity
falling by seven rigs to 204, while total U.S. drilling activity held unchanged
at 588 rigs.
In the U.S, oil-directed rigs rose by two to 449, while gas-directed
drilling numbers fell by two to 130. Miscellaneous rigs in the domestic market
were unchanged at a total of 9.
By trajectory, directional U.S. rigs fell by one to 42, while horizontal and
vertical units held steady at 535 and 10, respectively.
Analysis: Why Venezuelan Oil Alone Can't Fill The SPR Gap
The White House this week announced plans to take majority control of
Venezuela's vast oil reserves, estimated at around 65 billion bbl, and help
facilitate American companies with expanding production operations on the
ground. The statement said that 20% of the extracted oil will be used to
replenish the U.S. Strategic Petroleum Reserve (SPR) -- an unlikely
proposition, given crude quality concerns, refiner needs and logistical hurdles.
Grade Mismatch
The SPR requires a mix of grades that mirrors U.S. refiners' crude slates,
especially oil that is hard to substitute with domestic grades. Roughly
one-third of the reserve's current inventory consists of sweet crude.
Venezuelan crude, by contrast, is extremely sour, making it a poor fit for a
significant portion of the SPR's required composition.
The heavy oil is also exceptionally dense and viscous, meaning it must be
diluted with lighter hydrocarbons before it can be transported through
pipelines, both from the wellhead to the port and through the SPR's own
injection infrastructure in the U.S. This requires a steady supply of diluents
flowing into the country. Port loading capacity at Venezuelan terminals adds
yet another layer of constraint on how quickly volumes can move.
Slow Production Growth
Even if the logistical challenges were solved, Venezuela's oil industry is
in no position to meaningfully increase output on a compressed timeline.
Decades of underinvestment have left the country's petroleum infrastructure in
serious disrepair, and restoring production to levels sufficient for a major
SPR refill campaign would require enormous capital investment. To date, most
oil majors have shown little appetite to committing the necessary funds.
Chevron, one of the majors already operating in the Latin American country,
was the only company this week to jump on the bandwagon, announcing plans to
invest $7 billion over the next five years in order to raise production from
290,000 bpd to 600,000 bpd.
Stockpile Depletion
In March 2026, the White House announced the emergency release of 172
million bbl of crude oil from the SPR to combat soaring prices caused by the
largest oil supply disruption in history. Emergency reserves were just in the
process of being refilled after having dropped to a four-decade low 346.8
million bbl due to a combination of congressionally mandated sales and a 180
million bbl release in response to Russia's invasion of Ukraine in 2022.
EIA: Surging Crack Spreads Elevate U.S. Retail Fuel Costs
Elevated refining margins are largely responsible for driving U.S. retail
fuel costs higher in recent months, aside from rising crude prices, an analysis
published Friday (9/4) by the U.S. Energy Information Administration stated.
Since May, the New York Harbor gasoline crack spread averaged about $1
gallon above 2025 levels, when regional crack spreads peaked near 60 cents per
gallon, the EIA noted.
Prior to that, New York Harbor gasoline crack spreads held in a seasonal
winter-to-spring range of 30-60cts gallon while regional cracks stood at
20-40cts gallon across midcontinent and Gulf Coast hubs, historical EIA data
shows.
The latest surge is primarily due to acute global supply tightness stemming
from operational disruptions across processing hubs in Russia, China, and the
Middle East, the EIA analysis said.
The global shortfall has constrained domestic supply balances by
simultaneously raising import costs for coastal markets and pulling U.S.
product into export channels.
Since March, total U.S. imports of finished gasoline and blending components
dropped 32% below the five-year average, forcing greater reliance on U.S. Gulf
Coast waterborne shipments moving under limited Jones Act waivers.
Distillate processing margins have experienced even sharper expansion, with
New York Harbor distillate crack spreads averaging 74cts gallon above gasoline
cracks since March as domestic refiners maximize middle distillate yields.
Refinery outages in Russia and the Middle East left U.S. distillate
inventories 14% below five-year average levels as of late August, compared to a
6% deficit in gasoline.
Retail regular gasoline prices on the Monday before Labor Day averaged $4.07
gallon nationally, led higher by the West Coast at $5.21 gallon, and the Rocky
Mountain region at $4.27 per gallon. Gulf Coast retail prices remained the
lowest nationwide, averaging $3.62 gallon.
Marathon Galveston Bay Reports Resid Hydrotreater Leak
Marathon Petroleum's 631,000 bpd Galveston Bay refinery experienced an
emissions event following a loss of primary containment at the facility's Resid
Hydrotreating Unit, according to a filing with the Texas Commission on
Environmental Quality (TCEQ).
The event occurred Thursday (9/3) between 8:30 a.m. and 10:10 a.m. CT at the
largest U.S. refinery, located in Texas City, Texas, according to the filing
Friday (9/4).
The loss of containment prompted operators to depressurize the Resid
Hydrotreating Unit to the refinery's flare system, resulting in an estimated
1,900 pounds of sulfur dioxide emissions through Torch 8.
The Resid Hydrotreating Unit processes heavy residual refinery streams to
remove impurities and prepare the material for further processing into lighter
refined products.
Operators isolated the leak and depressurized the unit to the flare system
to minimize emissions, the filing added.
The Galveston Bay refinery primarily produces gasoline, diesel and jet fuel.
DTN reached out to Marathon Petroleum for additional details but did not get
an immediate response.
U.S. August Nonfarm Payroll Up 162,000, Jobless Rate Steady
The U.S. labor market rose in August to add 162,000 jobs, from July's
revised 21,000 while the unemployment rate remained steady at 4.1% from July,
the Bureau of Labor Statistics (BLS) announced Friday (1/9). The job growth was
above market expectations of 55,000 but below a forecast for an unemployment
rate of 4.2%.
Employment trended higher in food services, drinking places and in local
government education, while employment in the information industry declined,
the BLS said.
The number of people who had been jobless for 27 weeks or more changed
little at 1.9 million. Those employed part time for economic reasons was also
little changed at 5.3 million.
The number of people employed part time for economic reasons decreased by
414,000 to 4.4 million in August. "These individuals would have preferred
full-time employment but were working part time because their hours had been
reduced or they were unable to find full-time jobs," according to the BLS.
In August, average hourly earnings for all employees on private nonfarm
payrolls rose by 10 cents, or 0.3%, to $37.75. Over the year, average hourly
earnings have increased by 3.1%.
USGC Weekly: ULSD Spot Price Climbs 10%, Doubles YoY
U.S. Gulf Coast (USGC) refined product spot prices strengthened during the
week ended September 4, with ultra-low sulfur diesel (ULSD) and jet fuel rising
more than 10% as global supply disruptions continued to pull U.S. barrels into
export markets. ULSD prices more than doubled compared to the same week of last
year, according to DTN data.
Most of the fuel price increases were driven from the roll into a new
futures contract and a higher RVP. The rally was also supported by robust
export demand with international buyers seeking alternative supplies amid
restricted flows through the Strait of Hormuz and reduced availability of
Russian diesel.
ULSD at the Houston origin of the Colonial Pipeline averaged $4.6370 gallon,
rising 44.84cts, or 10.71%, from the previous week. The weekly average was
$2.3307, or 104.80%, above the $2.2240 gallon recorded during the comparable
week in 2025. The increase occurred despite the Energy Information
Administration on Wednesday (9/2) reported distillate stockpiles rose by 3.1
million bbl to 42.7 million bbl, recovering from a more than three-month low
recorded the previous week. Yet, inventories remained 1.3 million bbl below the
44 million bbl reported during the same week last year.
Meanwhile, jet fuel averaged $4.1182 gallon, up 41.77cts, or 11.29%, from
the previous week and $1.9777, or 95.68%, above the comparable 2025 level. The
hike was triggered by limited supplies. The EIA said jet fuel stocks fell by
500,000 bbl to 14.3 million bbl during the week ended August 28, hitting a
three-month low. Inventories remained 1.4 million bbl above the 12.9 million
bbl reported during the same week of the previous year.
On gasoline, Gulf Coast CBOB regular averaged $3.1474 gallon, rising
14.32cts, or 4.77%, from the previous week and $1.3066, or 67.38%, above the
comparable week in 2025.
Motor gasoline inventories in PADD 3 fell by 1 million bbl to 76.2 million
bbl during the week ended August 28, extending the previous week's 2.3 million
bbl decline. Inventories remained 5.1 million bbl below the 81.3 million bbl
reported during the same week of the previous year.
Refinery utilization in the region st increased to 97.7% from 97% the
previous week, while crude oil inputs rose to 9.6 million bpd from 9.5 million
bpd, leaving little room for unplanned downtime as Tropical Storm Edouard
affected Southeast Texas during the week.
Storm-related disruptions were reported at Motiva's Port Arthur refinery and
Valero's Port Arthur refineries on September 1. Motiva said severe weather
affected multiple process units, while Valero reported flaring and process
upsets following a temporary third-party power outage linked to the storm. No
prolonged refinery outages were reported in the region.
Midwest Weekly: Group 3 CBOB Up 16%, Leading Broad Rally
Group 3 CBOB soared 16% on the week to lead Midwest spot fuel markets
sharply higher as regional stockpiles remained tight despite elevated refinery
runs.
Group 3 CBOB in the Midcontinent surged 42.13cts, or 15.72%, on the week to
average $3.1023 gallon, up from $2.6809 gallon a week ago, DTN data showed.
PADD 2 cash fuel markets mounted a broad recovery as physical demand
tightened ahead of the Labor Day holiday weekend and the onset of the Midwest
agricultural harvest.
Chicago CBOB rose 18.13cts, or 6.40%, to average $3.0133 gallon. On regional
pipelines, Buckeye Complex CBOB gained 10.73cts, or 3.72%, to average $2.9933
gallon, while Wolverine CBOB advanced 16.23cts, or 5.63%, to average $3.0483
gallon.
The higher cash gasoline prices also reflected the rollover to October NYMEX
RBOB futures, and seasonal transition to higher-RVP gasoline specifications in
the Midwest.
Distillate cash markets posted double-digit percentage gains across all
regional distribution networks, underpinned by seasonal agricultural demand
expectations.
Group 3 ULSD jumped 50.45cts, or 12.5%, on the week to average $4.5402
gallon, while Chicago ULSD rallied 51.35cts, or 12.79%, to average $4.5292
gallon.
Buckeye Complex ULSD and Wolverine ULSD both surged 50.45cts, or 12.51%, on
the week to average $4.5372 gallon.
Aviation fuels matched the upward trajectory across the PADD 2 complex.
Chicago jet fuel advanced 24.75cts, or 6.82%, to average $3.8742 gallon, while
Group 3 jet fuel rose 5.75cts, or 1.46%, to average $3.9922 gallon.
The price surge came even as regional inventories expanded, highlighting
market concern over forward supply availability ahead of fall maintenance.
Energy Information Administration data for the week ended August 28 showed PADD
2 refiners running flat out, with crude input surging 69,000 bpd on the week to
4.425 million bpd to push regional utilization to 103.5%.
Despite the heavy processing throughput, Midwest fuel balances remain
historically tight. Regional distillate stocks rose 200,000 bbl last week to a
seven-week high of 28.8 million bbl, while motor gasoline inventories added
100,000 bbl to reach a five-week high of 43.4 million bbl -- still 1.6 million
bbl below year-ago levels.
NYH Weekly: ULSD Rises 11% as Stocks Hit All Time Low
New York Harbor refined-product spot prices rallied during the week ended
September 4, with ultra-low sulfur diesel (ULSD) rising more than 11% as East
Coast distillate inventories dropped to their lowest level on record. Jet fuel
and CBOB regular also posted double-digit weekly increases.
ULSD averaged $4.6447 gallon, up 47.04cts, or 11.27%, from the previous
week. The weekly average was $2.3277, or 101.78%, above the $2.2870 gallon
recorded during the comparable week in 2025, DTN data showed.
The U.S. Energy Information Administration reported Wednesday (9/2) that
PADD 1 distillate inventories fell by 1.7 million bbl to 19.3 million bbl
during the week ended August 28, the lowest level recorded since regional
weekly data began in January 1990. Inventories were 9.4 million bbl lower, or
32.8% below the same week last year, while distillate imports fell to 49,000
bpd from 133,000 bpd.
Despite record-low East Coast inventories, the weekly NYH-USGC ULSD spread
remained compressed near parity, with New York Harbor ULSD averaging only
0.77cts above the $4.6370 gallon USGC average. Strong overseas demand for Gulf
Coast diesel amid restricted flows through the Strait of Hormuz and reduced
global supply continued to compete with movements toward PADD 1 through
Colonial, limiting the incentive for incremental barrels to move north.
Jet fuel spot prices averaged $4.3388 gallon, rising 59.15cts, or 15.79%,
from the previous week. Prices were $2.0877, or 95.57%, above the comparable
2025 level. East Coast jet fuel inventories increased by 200,000 bbl to 11.2
million bbl and were 800,000 bbl above the 10.4 million bbl reported during the
same week of the previous year.
CBOB regular posted the strongest percentage increase of the week, rising
49.30cts, or 16.41%, to average $3.4974 gallon. The weekly average was $1.3516,
or 61.04%, above the comparable week in 2025.
The gasoline increase came as the market rolled to October NYMEX RBOB
futures and entered the broader fall Reid vapor pressure transition period. New
York Harbor's physical specification is scheduled to transition from 7.8 RVP to
12.9 RVP under the Buckeye East calendar on September 16.
PADD 1 gasoline inventories increased by 300,000 bbl to 52.6 million bbl
during the week ended August 28 but remained 2.9 million bbl below the 55.5
million bbl reported during the same week of the previous year. Gasoline
imports fell to 278,000 bpd from 433,000 bpd the previous week.
East Coast crude oil inventories increased by 100,000 bbl to 8.5 million
bbl. However, rRefinery utilization edged down to 86.6% from 86.7% as crude oil
inputs fell by 9,000 bpd to 788,000 bpd. No refinery flaring events were
reported in the New York Harbor region during the week.
This week, Buckeye Partners announced the start of expanded refined-product
transportation service under Phase 3 of its Michigan/Ohio pipeline expansion,
providing additional connectivity from Midwest supply points toward eastern
Pennsylvania and upstate New York. The expansion provides another route for
Midwest barrels into eastern markets as East Coast distillate inventories stand
at record lows and the narrow NYH-USGC ULSD spread limits the economic
incentive for additional Gulf Coast barrels to move north through Colonial.
USWC Weekly: Portland ULSD Rises 19.54% on Week
U.S. West Coast refined product spot prices increased across all nine
markets tracked by DTN during the week ended September 4, led by sharp advances
in diesel while gasoline and jet fuel also strengthened. The increases came as
regional gasoline and distillate inventories remained tight despite continued
high refinery utilization.
Portland ULSD recorded the steepest weekly increase, rising 82.54cts, or
19.54%, to a weekly average of $5.0502 gallon. Prices were 81.30% above the
corresponding period of the previous year.
San Francisco ULSD followed, increasing 72.14cts, or 16.58%, to average
$5.0722 gallon, while Los Angeles ULSD rose 51.34cts, or 11.49%, to $4.9822
gallon. Compared with the previous year, San Francisco and Los Angeles ULSD
were 99.06% and 95.80% higher, respectively.
Among gasoline grades, Portland sub-octane recorded the largest weekly
increase, rising 33.14cts, or 10.10%, to average $3.6113 gallon. San Francisco
CARBOB regular increased 23.34cts, or 6.37%, to $3.8953 gallon, while Los
Angeles CARBOB rose 19.14cts, or 5.34%, to $3.7753 gallon. The three gasoline
grades stood 53.34%, 66.52% and 61.10%, respectively, above the corresponding
period of the previous year.
Some of the larger price increases during the week were linked to the
September 1 transition to higher Reid vapor pressure (RVP) seasonal fuel
specifications across West Coast markets.
Jet fuel prices also strengthened across Los Angeles, San Francisco and
Portland, increasing 22.89cts, or 5.93%, to average $4.0897 gallon. Prices at
all three hubs were 76.75% above the corresponding period of the previous year.
The Energy Information Administration reported Wednesday (9/2) that PADD 5
gasoline inventories stood at 27.2 million bbl during the week ended August 28,
their lowest level in three months and below the 30.2 million bbl reported
during the same week of the previous year. Gasoline imports declined to 22,000
bpd from the prior week.
Regional distillate fuel stockpiles fell by 700,000 bbl to 9.9 million bbl,
also their lowest level in more than three months and below the 11.7 million
bbl reported during the corresponding week of the previous year. Jet fuel
inventories increased by 300,000 bbl to 11.4 million bbl, slightly above the
previous year's 11.3 million bbl.
PADD 5 crude oil inventories increased by 2.4 million bbl to 47.7 million
bbl, while crude imports rebounded to 1.144 million bpd from 826,000 bpd the
previous week.
Refinery utilization on the West Coast eased to 92.8% from 93.7% the
previous week. No refinery outages, flaring events or other significant supply
disruptions were reported across the region during the week.
(c) Copyright 2026 DTN, LLC. All rights reserved.
