Los Angeles Jet Basis Falls 7cts on Lower Bids


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- Prompt Los Angeles jet fuel basis weakened Friday (5/29), 
falling by 7cts on lower bids, despite declining U.S. West Coast jet fuel 
inventories and imports.

Los Angeles jet fuel traded twice during the session, first at a 7cts premium 
and later at an 8cts premium to July NYMEX ULSD futures. The final trade placed 
the basis at an 8cts premium, 7cts down from Thursday's (5/28) last assessed 
level.

The decline follows several weeks of volatility in the Los Angeles jet fuel 
market. Earlier this month, the basis climbed by 15cts on May 5 to a 60cts 
premium after rebounding from a sharp correction that followed the historic 
$1.10 gallon premium reached in late April, the highest level ever recorded for 
the market.

According to U.S. Energy Information Administration data for the week ended May 
22, jet fuel inventories on the West Coast fell by 200,000 bbl to 10.8 million 
bbl and were 100,000 bbl lower than the same week last year.

Jet fuel imports into the region dropped sharply by 64,000 bpd to 25,000 bpd 
during the profiled week and were 156,000 bpd lower than the same week last 
year, leaving fewer barrels available to replenish regional supply.

Traders said the market pulled back Friday after the sharp gains seen earlier 
this spring, with weaker spot demand weighing on values. Still, supply concerns 
remain in focus as the West Coast prepares for peak summer travel demand.

The shutdown of Phillips 66's 139,000 bpd Los Angeles refinery and the ongoing 
closure process at Valero's 145,000 bpd Benicia refinery have reduced regional 
refining capacity, limiting the market's ability to quickly replace lost 
production and helping support jet fuel values despite Friday's decline.

    




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