Midwest Fuel Values Dip on Wk as Jet Fuel, ULSD Slide


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Midwest fuel spot prices slid this week, led by a 
sharp decline in Group 3 jet fuel averages, DTN data showed Friday (6/12), as 
easing prompt supply concerns and a quiet operational front across the region 
helped reverse upward pressure seen last week.

   The biggest move of the week came in the Group 3 jet fuel market, where the 
average fell by 20.29cts to $2.7541 gallon, marking a 6.86% decline from the 
previous week's average of $2.9570 gallon.

   The steep drop in jet fuel prices came despite Energy Information 
Administration data showing PADD 2 jet fuel inventories actually fell 200,000 
bbl to 7.4 million bbl. However, regional inventories remained a comfortable 
800,000 bbl above year-ago levels, which likely cushioned the market against 
supply anxiety.

   Group 3 ULSD basis also weakened, falling $0.1109 gallon after starting the 
week significantly higher. The ULSD weekly average price was $3.3086, down 
3.24% from the $3.4195 recorded a week earlier, and up 36% year-over-year.

   The downturn in diesel aligned with a 300,000 bbl build in PADD 2 distillate 
inventories to 25.3 million bbl during the week ended June 5, according to the 
EIA. Easing supply worries were further supported by regional refinery inputs 
climbing to 4.205 million bpd from 4.148 million bpd the prior week.

   Meanwhile, Group 3 suboctane gasoline bucked the downward trend, trading as 
high as $3.0014 gallon on Thursday (6/11) before dropping to 2.9630 by Friday. 
Week-on-week, the average suboctane gasoline price rose $0.0276 gallon, or 
0.94% above the $2.9355 reported in the previous week. This was 45% above the 
same week of last year.

   Gasoline's resilience came despite a 1.1 million bbl rebound in PADD 2 
stocks to 44.4 million bbl last week, suggesting traders remained cautious as 
regional gasoline inventories stayed 3.0 million bbl below year-ago levels 
heading deeper into summer driving.

   Among Midwest refineries this week, contract negotiations at BP's 435,000 
bpd facility in Whiting, Indiana remained at an impasse since March while 
Cenovus Energy experienced an operational issue that led to brief intense smoke 
and flaring at its 172,000 bpd Lima refinery in northwest Ohio.

   With no other disruptions or unplanned outages reported, traders appeared 
more focused on rising refinery utilization and improving overall inventory 
trends. The broad declines across diesel and jet fuel averages provide a softer 
entry heading into peak seasonal demand.




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