Analysis: Chicago Fuels at Firm Discounts Ahead of Holidays


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- Chicago refined products are entering the holiday 
period steady, with gasoline and distillate basis values holding at consistent 
discounts to front-month futures; a more stable trend than earlier this year, 
according to DTN Energy data.

   In October and November, Chicago CBOB's monthly average narrowed from a 
13.12cts discount to 11.90cts. The latest assessment of a 22cts discount puts 
CBOB below its 2025 average discount of 9.76cts, reflecting ample supply and 
softer seasonal demand. That marks a sharp contrast to earlier-year volatility, 
including the spring Whiting-related premium spike. November trading has 
remained firmly discounted, and year-over-year comparisons show a looser 
structure than the same period in 2024, when CBOB was only slightly discounted.

   Chicago ULSD followed a similar pattern, with November averaging a 5.72cts 
discount to front-month ULSD futures compared with 6.18cts in October. The most 
recent 27.5cts discount is well below the 2025 discount average of 10.34cts, 
consistent with stable PADD 2 supply and muted early-winter demand. ULSD's 
yearly range from a 16cts premium to a 41cts discount, highlights how calm 
current levels are relative to the more dramatic early- and mid-year swings.

   Stronger regional refining performance continues to support that stability. 
According to the U.S. Energy Information Administration, PADD 2 refinery 
utilization reached 95.3% in the week ending November 14, well above the 87% 
level recorded in the same period of 2024. Market participants said steady 
refinery output and uninterrupted pipeline flows have kept rack conditions well 
supplied heading into late November.

With supply holding firm and seasonal demand manageable, Chicago's refined 
product market is expected to remain steady in December. CBOB and ULSD are 
likely to trade near current discount levels, with any brief upticks tied to 
cold-weather demand or minor logistical adjustments. Barring a major refinery 
issue, traders said Chicago will continue to guide Midwest refined-product 
pricing through year-end.




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