MARKETWIRE ALERTS
Maria Eugenia Garcia
DTN Energy Editor
MARKETWIRE ALERTS MarketWire Afternoon News October 23:Updated at 6:05 PM ET HEADLINES:
Midwest Weekly: Buckeye CBOB Swings Amid Joliet ConcernsNYH Weekly: Jet Fuel
Rises 5.6%; CBOB Drops 3.5%USGC Weekly: CBOB Drops 6.5%; Jet Fuel RisesBuckeye
CBOB Plunges 85cts as Midwest Spot Rally CoolsUSGC and NYH Jet Fuel Basis
Weakens on Futures Rally USWC Weekly: ULSD, Jet Fuel Up Over 2%; Gasoline
MixedBaker Hughes: Weekly N. America Rigs Fall 5 to 820Analysis: Federal Diesel
Measures, Temporary Relief OnlyU.S. Diesel Rack Prices Jump 16cts, Gasoline
7cts on WeekUniversity of Michigan Consumer Sentiment Edges Lower in Oct
News:
Midwest Weekly: Buckeye CBOB Swings Amid Joliet Concerns
Midwest refined-product spot prices experienced sharp volatility this week,
with the basis for Buckeye Complex CBOB hitting four-year highs before giving
back 85% of its gain in just a day.
The heightened activity in spot gasoline across eastern pipeline networks
and Chicago during the week ended October 23 was triggered by an operational
upset at ExxonMobil's 275,000 bpd Joliet refinery.
Distillates and jet fuel posted broad gains during the week, while
Midcontinent spot values declined.
Chicago CBOB recorded the steepest weekly advance across the Midwest
gasoline complex, climbing 23.51cts, or 7.10%, to average $3.5445 gallon, DTN
data showed.
But Buckeye CBOB captured the most volatility. On Thursday (10/22) alone,
its spot basis jumped 62cts to a four-year high of $1.00 gallon premium over
November NYMEX RBOB futures. The rally came after ExxonMobil reported on
Tuesday (10/20) a process upset that led to a flaring event at the Joliet plant.
While the operator had not issued an update since, the spot momentum in
Midwest gasoline cooled abruptly by Friday (10/23), with the Buckeye CBOB basis
plummeting 85cts to stand a 15cts gallon premium over November futures.
"In just a day, everything pulled back, raising more questions on near-term
direction," a Midwest fuels trader told DTN.
For the week, Chicago CBOB surged 23.46cts, or 6.97%, to average $3.6000
gallon. CBOB on the Wolverine pipeline advanced 18.46cts, or 5.51%, to average
$3.5360 gallon.
Bucking the pipeline rally, Midcontinent Group 3 CBOB fell 11.19cts, or
3.26%, to average $3.3255 gallon.
The upward move in physical gasoline was also helped by Energy Information
Administration (EIA) data which showed PADD 2 motor gasoline inventories up
just 100,000 bbl during the week ended October 16 to stand at 42.3 million bbl.
That kept regional gasoline supplies constrained at 3.5 million bbl below
year-ago levels.
In distillate trading, Chicago ULSD recorded the largest gain, climbing
23.43cts, or 4.95%, to average $4.9682 gallon. Buckeye Complex ULSD and
Wolverine ULSD each advanced 22.08cts, or 4.56%, to average $5.0567 gallon.
Group 3 ULSD slipped 4.52cts, or 0.89%, to $5.0147 gallon. All four regional
diesel markets remained more than $2.60 gallon above their year-ago levels.
Midwest distillate strength was underpinned by EIA data showing PADD 2
distillate stockpiles drew by 400,000 bbl during the week ended October 16 to
25.3 million bbl--the lowest regional level logged since June 5.
In jet fuel markets, Chicago led gains, rising 21.83cts, or 4.97%, to
average $4.6082 gallon. Group 3 jet fuel advanced 16.73cts, or 3.27%, to
average $5.2832 gallon. Regional jet fuel inventories recovered by 100,000 bbl
on the week to 7.3 million bbl, remaining 300,000 bbl below year-ago levels.
Midwest refinery operations picked up on the week, with PADD 2 capacity
utilization edging up 0.5 percentage points to 90.2% and crude inputs
increasing by 25,000 bpd to average 3.860 million bpd.
Meanwhile, the labor dispute at BP's 440,000-bpd Whiting, Indiana refinery
remained unresolved, with approximately 800 United Steelworkers Local 7-1
employees locked out since March, although BP reported operations were
unaffected.
NYH Weekly: Jet Fuel Rises 5.6%; CBOB Drops 3.5%
New York Harbor refined-product prices diverged during the week ending
October 23, with jet fuel advancing more than 5% while CBOB regular declined
more than 3% and ULSD edged lower. The moves came as East Coast distillate and
gasoline inventories remained tight heading deeper into the fall season.
Jet fuel averaged $5.0674 gallon through Thursday, up 26.80cts, or 5.58%,
from $4.7994 gallon the previous week. The average was $2.6731, or 111.65%,
above the $2.3943 gallon recorded during the comparable week in 2025, DTN data
showed.
ULSD averaged $4.9814 gallon, down 3.95cts, or 0.79%, from the previous week
but more than double its year-earlier level. The diesel benchmark was $2.5896,
or 108.27%, above the $2.3918 gallon average during the comparable 2025 week.
The price strength in distillates came against lean East Coast supplies. EIA
data for the week ended October 16 showed PADD 1 distillate inventories fell by
500,000 bbl to 21 million bbl, leaving stocks 21.6% below the previous year and
still near the record-low levels reached in late August.
CBOB regular moved in the opposite direction, averaging $3.2019 gallon, down
11.74cts, or 3.54%, from the previous week. Despite the decline, CBOB remained
$1.2908, or 67.54%, above the $1.9111 gallon average during the same week last
year. East Coast gasoline inventories fell by 2 million bbl to 51.6 million bbl
during the week ended October 16.
Jet fuel inventories increased by 600,000 bbl to 9.9 million bbl, while East
Coast refinery utilization slipped to 80.8% from 81.1% the previous week.
Phillips 66 began a lockout of union workers at its 275,000-bpd Bayway
refinery in New Jersey on October 19 following the expiration of a labor
agreement. The company said supervisors and engineers would maintain
operations, and no reduction in refinery throughput was confirmed. No confirmed
refinery outages were reported in the East Coast region during the week.
USGC Weekly: CBOB Drops 6.5%; Jet Fuel Rises
U.S. Gulf Coast CBOB regular posted the sharpest weekly decline among the
region's major refined products during the week ending October 23, falling more
than 6%, while jet fuel strengthened and ULSD eased from the previous week's
elevated average.
CBOB regular averaged $2.9716 gallon through Thursday, down 20.76cts, or
6.53%, from $3.1792 gallon the previous week. Even after the weekly decline,
the average remained $1.2300, or 70.62%, above the $1.7416 gallon recorded
during the comparable week in 2025, DTN data showed.
ULSD averaged $4.7247 gallon, down 7.86cts, or 1.64%, from the previous
week. Prices remained more than double year-earlier levels, rising $2.4229, or
105.26%, from the $2.3018 gallon average during the comparable 2025 week.
Jet fuel bucked the broader weekly decline, averaging $4.6137 gallon, up
8.69cts, or 1.92%, from the previous week and $2.3694, or 105.57%, above the
$2.2443 gallon average recorded during the same week last year.
EIA data for the week ended October 16 showed Gulf Coast distillate
inventories rebounded from the previous week's decline, while gasoline and jet
fuel supplies decreased. Commercial crude stocks fell by another 5.1 million
bbl to 229.3 million bbl, marking a third consecutive weekly draw and taking
inventories below the 230.6 million bbl reported at the end of July.
Refinery activity remained an important backdrop for Gulf Coast supply.
Valero reported this week that its FCC optimization project at the 340,000-bpd
St. Charles refinery in Louisiana was completed during the third quarter,
expanding the facility's capability to produce alkylate and gasoline.
Separately, repairs remain underway on a damaged distillate hydrotreater at
Valero's 435,000-bpd Port Arthur refinery in Texas, with mechanical completion
targeted by the end of the fourth quarter. The company has reported normal
refinery throughput. No new Gulf Coast refinery outages were reported during
the week.
Buckeye CBOB Plunges 85cts as Midwest Spot Rally Cools
The basis for Buckeye CBOB plummeted 85cts Friday (10/23), after a four-year
high the day prior, cooling along with slowing rally in NYMEX futures of the
fuel.
The premium for Buckeye CBOB stood at just 15cts gallon over the December
NYMEX RBOB contract, versus the $1.00 gallon Thursday (10/22).
Chicago CBOB basis fell 60cts to a 20cts gallon premium, while Wolverine
CBOB basis dropped 43cts to a 20cts gallon premium.
In the Midcontinent, Group 3 CBOB basis followed the broader regional
retreat, falling 13cts to a 14.5cts gallon premium.
"In just a day, everything pulled back, raising more questions on near-term
direction," a Midwest fuels trader told DTN.
Aside from the futures rally, Thursday's surge in spot values of Midwest
gasoline was triggered partly by concerns over ongoing operational issues at
ExxonMobil's 275,000 bpd Joliet refinery. The operator reported on Tuesday
(10/20) a process upset that led to a flaring event. It has not issued an
update since.
Friday's pullback came as the advance in gasoline futures slowed. December
RBOB rose $0.0400 to settle at $3.2165 gallon but still posted a weekly loss of
nearly 1%.
USGC and NYH Jet Fuel Basis Weakens on Futures Rally
U.S. Gulf Coast (USGC) and New York Harbor jet fuel basis weakened on Friday
(10/23) as oil futures markets hit a five-month high on escalating Middle East
conflict.
The USGC jet fuel traded multiple times at a 20cts discount to the November
NYMEX ULSD futures, 18.25cts down from the prior session. In the New York
Harbor, the same product was assessed at a 20cts premium over the same
benchmark, a 15cts drop from Thursday's assessment.
The jet fuel spot market tracked the underlying ULSD futures contract, which
settled at $4.9842 per gallon, its highest level since September 16, according
to DTN data. Meanwhile, crude oil benchmarks climbed nearly 4% on the day amid
concerns about escalating attacks between the United States and Iran during the
U.S. midterm elections.
USWC Weekly: ULSD, Jet Fuel Up Over 2%; Gasoline Mixed
Spot prices for ultra-low sulfur diesel (ULSD) and jet fuel rose more than
2% across most of the U.S. West Coast during the week ended October 23, while
values for CARBOB regular fell in Los Angeles and San Francisco despite a third
straight weekly decline in regional stockpiles.
The divergence also came as PADD 5 refinery utilization dropped to its
lowest levels since early August.
ULSD in Los Angeles averaged $5.3582 gallon, rising 11.83cts, or 2.26%, from
the previous week. Year-on-year, it was up 110.40%, DTN data showed.
In San Francisco, ULSD edged up 4.23cts, or 0.78%, to average $5.4582
gallon, or 114.06% above year-ago levels. Portland ULSD climbed 18.58cts, or
3.66%, to $5.2582 gallon, up 92.60% from a year earlier.
Weekly U.S. Energy Information Administration (EIA) data for the week ended
October 16 showed PADD 5 distillate inventories rising by 300,000 bbl to 10.3
million bbl. For the year though, stockpiles remained about 2.5 million bbl
below the 12.7 million bbl reported during the comparable week of 2025.
Distillate refinery output edged up to 422,000 bpd from 414,000 bpd, and
imports increased to 23,000 bpd from 19,000 bpd.
Despite the higher diesel prices, the outlook for demand appeared mixed.
Valero Energy, on its third-quarter earnings call Thursday (10/22), said it
sees "no indication of demand destruction," citing seven-day average U.S.
wholesale gasoline sales up 4% and distillate sales up about 2% from a year
earlier.
That runs against a recent California Farm Bureau survey of more than 1,000
farmers and ranchers that indicated three out of four people experiencing
increased financial stress from diesel prices. Some 40% of the survey's
respondents said they had reduced field work, and more than half said lower
diesel prices would help keep their operations viable.
Jet fuel followed diesel higher, with Los Angeles, San Francisco and
Portland each rising 12.63cts, or 2.62%, to average $4.9482 gallon. Prices
stood 88.57% above their corresponding 2025 level.
West Coast jet fuel inventories also increased, rising by 152,000 bbl to 11
million bbl from 10.9 million bbl. Stocks were about 1 million bbl below the
equivalent week of the previous year. Jet fuel refinery output fell to 419,000
bpd from 440,000 bpd, and imports declined to 76,000 bpd from 91,000 bpd.
Gasoline prices were mixed. San Francisco CARBOB fell 16.44cts, or 4.45%, to
$3.5310 gallon, while Los Angeles CARBOB regular slipped 11.39cts, or 3.11%, to
average $3.5515 gallon. Prices remained 62.08% and 58.45% above their
comparable 2025 levels, respectively. Portland suboctane gasoline moved against
the trend, rising 5.41cts, or 1.62%, to average $3.3995 gallon, 69.88% above a
year earlier.
The declines in Californian gasoline prices came despite EIA data showing
lower PADD 5 inventories for these for a third consecutive week, as stockpiles
fell 300,000 bbl to 27.5 million bbl. Year-on-year, gasoline balances were 2
million bbl below the 29.5 million bbl reported for the comparable week of
2025. Gasoline refinery output dropped to 1.299 million bpd from 1.333 million
bpd, the lowest since the week ended November 21, 2025, and imports fell to
55,000 bpd from 96,000 bpd.
PADD 5 refinery utilization declined to 92.0% of operable capacity from
93.2% the previous week, the lowest since the week ended August 7.
One flag on the data: LA ULSD on 10/15 (5.4956) and 10/16 (5.5491) sits
above San Francisco, though it is below SF on every other day. If those two are
typos, last week's LA average would change, and so would the 11.83cts and 2.26%
figures.
Baker Hughes: Weekly N. America Rigs Fall 5 to 820
North American energy drilling activity rose by three rigs to 823 in the
current week, Baker Hughes' weekly rotary rigs report released Friday (10/23)
showed.
Compared with the corresponding week of 2025, combined rigs for Canada and
the United States were up 74 from the 749 units active during that period,
according to the report.
This week's increase was driven by Canada adding three rigs to 220, while
the U.S. rig count was unchanged at 603.
Oil-directed U.S. rigs rose by one to 460, while gas-directed drilling fell
by one to 132. Miscellaneous rigs were unchanged at 11.
By trajectory, U.S. horizontal rigs fell by nine to 528, while directional
rigs increased by 11 to 54. Vertical rigs were unchanged at 21.
Analysis: Federal Diesel Measures, Temporary Relief Only
Recent U.S. federal measures to boost diesel supplies are likely to offer
only temporary relief rather than resolve the ongoing domestic shortage.
The U.S. Department of Energy on Wednesday (10/21) announced the release of
315,000 bbl of heating oil from strategic reserves in the latest supply-side
measure by the executive branch aimed at taming sky-high diesel prices. Like
the White House's recently struck deal with the Kremlin to purchase diesel from
Russia, however, this marginal bump in supply is dwarfed by the size of global
declining fuel inventories.
Deliveries of about a third of the roughly one million bbl of heating oil
designated ultra-low sulfur diesel held in the Northeast Home Heating Oil
Reserve are set to be completed over the next three weeks and will come in the
form of loan outs.
Given the magnitude of the global diesel supply shortage and depleted
commercial inventories, the release of less than two hours' worth of national
diesel consumption is unlikely to significantly move the needle.
The International Energy Agency in its latest monthly oil market report
pegged the global diesel supply deficit at 1.7 million bpd in the third
quarter, up from 1.5 million bpd in the second quarter.
New England diesel and heating oil stocks have been hovering around half of
typical levels for most of the year and are currently still near the
multi-decade low reached at the end of August.
Moreover, inventories along the entire East Coast have continuously declined
throughout the year, leaving the region without an opportunity to restock ahead
of winter. Diesel stocks typically expand between Memorial and Labor Day, a
period coinciding with peak refining activity and seasonally lower diesel
demand, with stockpiles consequently growing by about 25% on average during
this 3.5-month period.
Amid a tightening global diesel market this year, however, East Coast
distillate fuel oil stockpiles instead shrank by 10% during that time.
Latest U.S. Energy Information Administration Data show that commercial
inventories in the region are currently just above 21 million bbl, compared to
the five-year seasonal average of 29.71 million bbl.
The planned emergency reserve release, aside from representing a rounding
error measured against the current diesel supply deficit, is not even
guaranteed to help lift New England diesel stocks from their all-time seasonal
lows, as tight market conditions discourage storage.
Additionally, the volume in question, while close to 13% of current
inventory levels, is only a fraction of the more than 2 million bbl needed to
restock to normal levels ahead of winter.
First Russian cargo
The U.S. East Coast, meanwhile, is awaiting the first delivery of Russian
diesel in more than four years. Given the average voyage time between the
Baltic Sea and New York Harbor, the first Russian diesel cargo bound for the
U.S. since the White House waived sanctions on the country and the Kremlin in
return lifted its diesel export ban is expected to arrive two weeks from now.
The 300,000 bbl are part of the 2.25 million bbl of diesel that Russia
committed to supplying to the global market in October.
Russia meeting the lofty export targets set for November and December of 4.5
million bbl and 9 million bbl, respectively, would indeed provide some respite
to a tight market. The prospects of Russian diesel exports returning to normal
levels by year-end, however, are more than dim. Ukrainian attacks on Russian
downstream infrastructure have by now knocked out more than half of the
country's refining capacity. Costly and time-consuming repairs are unlikely to
be completed in short order, especially considering currently low chances of an
imminent ceasefire. In fact, refiners may even be purposefully holding back on
repair work given the security situation, as several plants were again struck
and damaged within weeks of reemerging from a prior attack.
Reports this week suggested that Rosneft, owner of around a third of Russian
refining capacity, has been pumping the maintenance brakes at its plants and
is, bar political pressure, likely to continue to do so until the threat to
refining infrastructure eases.
Given these factors, the federal supply-side measures taken over recent
weeks are likely to be little more than a band-aid on a flesh wound.
Setting aside unpopular measures to curb demand, the most effective way for
the government to ease the burden on consumers and businesses is tackling the
core reason of the supply deficit. However, considering growing signs pointing
to an escalation in fighting after the midterm elections, may be a rather
unlikely proposition.
U.S. Diesel Rack Prices Jump 16cts, Gasoline 7cts on Week
U.S. wholesale rack prices for ultra-low sulfur diesel (ULSD) finished
higher on the week ended October 23, while gasoline prices were mixed as supply
disruptions driven by the Middle East conflict continue pressuring fuel markets.
Nationwide ULSD rack prices averaged $5.4283 gallon, up 15.81cts, or 3.0%,
from the previous week's $5.2702 gallon. Conventional unleaded gasoline
averaged $3.2768 gallon, down 6.76cts, or 1.97%, from $3.4317 gallon a week
earlier.
Four of the five PADD regions finished above the previous week's levels. The
Midwest posted the strongest increase, rising 30.28cts, or 5.81%, to $5.5174
gallon, due to supply tightness amid ongoing operational issues at ExxonMobil's
275,000 bpd Joliet refinery
Gulf Coast ULSD rack prices rose 23.45cts, or 4.70%, to $5.2212 gallon,
despite Environmental Protection Agency (EPA) extended its emergency diesel
fuel waiver in Texas through November 13, allowing continued use of
higher-sulfur diesel in certain older engines.
Rack prices at the East Coast advanced 9.80cts, or 1.92%, to $5.2052 gallon.
Rocky Mountain diesel edged up 3.37cts, or 0.59%, to $5.7527 gallon. The
West Coast remained the highest-priced diesel region at $5.9176 gallon,
although prices slipped 2.26cts, or 0.38%, from the previous week.
Gasoline racks showed a more mixed regional pattern despite the decline in
the U.S. average. The Gulf Coast recorded the sharpest weekly drop, falling
66.21cts, or 18.02%, to $3.0120 gallon. The drop was driven by the transition
from gasoline A3 specification toward higher-volatility A4 gasoline. The
seasonal transition raises the Reid vapor pressure (RVP) specification from
12.5 psi for A3 gasoline to 14.5 psi for A4, a 2 psi increase that allows
greater volatility in winter-grade CBOB gasoline shipped on Colonial Pipeline.
Meanwhile, West Coast gasoline rack prices declined 42.64cts, or 10.17%, to
$3.7672 gallon, while East Coast prices fell 5.22cts, or 1.68%, to $3.0618
gallon.
Rocky Mountain gasoline rack prices saw the steepest increase, climbing
81.36cts, or 27.22%, from the previous week to $3.8023 gallon, followed by
Midwest gasoline, which rose 7.62cts, or 2.38%, to $3.2799 gallon on the week.
Rack prices continued tracking a weekly rally in the oil futures market
driven by the escalating Middle East conflict. At 12:00 am ET the NYMEX WTI
futures contract for December delivered rose $2.46 to $102.66 bbl an 8%
increase from the previous week.
The diesel crack stood at $105.20 bbl Friday, compared with the gasoline
crack at $35.85 bbl, reflecting stronger distillate refining margins.
University of Michigan Consumer Sentiment Edges Lower in Oct
U.S. consumer sentiment edged lower in October, with the Index of Consumer
Sentiment down 0.1 point, or 0.2%, from September to finish at 48.0, the
University of Michigan Surveys of Consumers report showed Friday (10/23).
Year-on-year, UMich's headline consumer sentiment reading was lower by 5.6
points, or 10.4% from October 2025.
The Current Economic Conditions Index, measuring sentiment about personal
finances and buying conditions, was revised down to 46.7, or 8.3%, from
September's 50.9. Year-on-year, the current conditions measure dropped 20.3%.
The Index of Consumer Expectations, reflecting the 12-month economic
outlook, rose 2.5 points, or 5.4%, to 48.8 - bucking the downtrend for the
month. For the year though, that index was still off, declining 3%.
"Consumer sentiment held steady this month, registering a scant one-tenth
of an index point below September," Umich Surveys of Consumers Director Joanne
Hsu said, referring to the headline index.
Year-ahead inflation expectations were finalized at 4.7%, up from 4.6% in
September. This remains well above the 3.4% level seen in February 2026 prior
to the outbreak of the Iran conflict.
Long-run inflation expectations rose to 3.5% from 3.4% in September, with
inflation expectations across short- and long-term horizons holding at their
highest levels since May.
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