U.S. Rack Diesel Falls 6.33cts Despite Oil Rebound


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- U.S. wholesale rack prices for ultra-low sulfur 
diesel (ULSD) and gasoline declined for a third consecutive day Wednesday 
(11/11), extending their recent retreat despite a recovery in crude oil and 
refined product futures as renewed Middle East supply concerns and tighter U.S. 
crude inventories supported energy markets.

   Nationwide ULSD rack prices fell 6.33cts, or 1.4%, to $4.5695 gallon from 
Tuesday's revised $4.6328 gallon, according to DTN data. Conventional unleaded 
gasoline declined 3.97cts, or 1.5%, to $2.6341 gallon from $2.6738 gallon.

   Oil futures recovered Wednesday following Tuesday's sharp selloff as renewed 
tensions in the Middle East tempered expectations for a near-term diplomatic 
resolution to the U.S.-Iran conflict. Industry data indicating a decline in 
U.S. crude inventories provided additional support, although uncertainty over 
regional shipping security continued to influence the supply outlook.

   WTI futures advanced $1.31 to $87.36 bbl, while NYMEX ULSD climbed 10.32cts 
to $4.2342 gallon. RBOB gasoline edged up 0.76ct to $2.6164 gallon, contrasting 
with continued weakness at wholesale racks.

   Refining margins were mixed, with the diesel crack rebounding $3.08 to 
$90.54 bbl after falling sharply earlier in the week. However, the spread 
remained below the $100 bbl threshold reached in late October. The gasoline 
crack declined $0.96 to $22.56 bbl, reflecting continued pressure on gasoline 
refining economics.

   The market also awaited Thursday's Energy Information Administration 
petroleum inventory report, delayed one day by the Veterans Day holiday. 
Tuesday's American Petroleum Institute data showed a 9 million bbl increase in 
crude inventories, alongside a 1.5 million bbl distillate build and a marginal 
4,000 bbl gasoline increase, suggesting potential additional supply pressure if 
confirmed by government figures.

   ULSD rack prices declined across all five PADDs, led by the Rocky Mountains, 
down 10.14cts to $4.8553 gallon. West Coast diesel fell 9.4cts to $5.1158 
gallon, while Gulf Coast prices dropped 6.52cts to $4.4562 gallon.

   Gasoline racks also weakened nationwide, with Rocky Mountain prices falling 
6.08cts to $2.7939 gallon, followed by the West Coast, down 5.77cts to $3.2508 
gallon. East Coast gasoline declined 4.22cts to $2.5760 gallon.

    




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