MARKETWIRE ALERTS


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   MARKETWIRE ALERTS 

   MarketWire Afternoon News Sept 17:

   Updated at 5:00 PM ET 

    

   HEADLINES:

    

   -- Chicago CBOB Basis Up 19cts Amid Midwest Gasoline Rally

   -- Chicago ULSD Basis Up 44cts as Joliet Outages Jolt Market

   -- ExxonMobil's Joliet Reports Flood Impact After Power Outage

   -- Analysis: Diesel Margins Prolong Summer Refining Season

   -- EIA: US NatGas Storage Reports 44 Bcf Weekly Injection

   -- Gasoline Racks Retreat 5.78cts; ULSD Holds Firm

    

   NEWS

    

   Chicago CBOB Basis Up 19cts Amid Midwest Gasoline Rally

   Chicago CBOB basis surged 19cts Thursday (9/17) to lead broad gains across 
Midwest distribution networks taking their cue from a rally in NYMEX gasoline 
futures.

   With the surge, Chicago CBOB basis reached 38cts gallon premium over the 
October NYMEX RBOB contract.

   Eastern pipeline networks matched the Chicago premium after the Buckeye 
Complex CBOB basis rose 13cts while Wolverine CBOB basis climbed 8cts.

   Regional gasoline supply remains under pressure following Thursday's 
secondary incident at ExxonMobil's Joliet complex, where floodwater overwhelmed 
a pump, following the initial Sunday power outage that shut down the 275,000 
bpd facility. The refinery represents an important supplier of gasoline and 
diesel across Chicago and broader Midwest markets.

   In Midcontinent trading, Group 3 CBOB basis edged up 0.5ct to stand at a 
premium of 9cts gallon against the benchmark.

   The ongoing firming across physical markets comes despite building regional 
supply buffers. EIA data showed PADD 2 motor gasoline inventories rose 900,000 
bbl during the week ended Sept. 11 to 44.1 million bbl -- the highest level 
since late July -- despite regional refiner crude processing dropping to 4.241 
million bpd.

   Physical strength aligned with the upward momentum in futures as October 
NYMEX RBOB advanced 2.23cts, or 0.64%, to end the session at $3.5073 gallon 
after peaking at $3.5325.

    

   Chicago ULSD Basis Up 44cts as Joliet Outages Jolt Market

   Chicago ultra-low sulfur diesel (ULSD) led the rally in Midwest distillate 
markets Thursday (9/17) as mounting disruptions at ExxonMobil's Joliet refinery 
jolted markets already unnerved by physical fuel tightness.

   Chicago ULSD basis surged 44cts to a premium of 55cts gallon over October 
NYMEX ULSD. Eastern pipeline networks mirrored the upward momentum, with 
Buckeye Complex ULSD basis advancing 45cts and Wolverine ULSD basis rising 
40cts to match the 55cts premium against the NYMEX benchmark.

   "Joliet is the big issue there for sure," said one Midwest fuels trader, 
adding that supply tightness appears poised to sustain through the current 
trading cycle. "It seems to have some legs here. We're not done with the cycle 
until basically next Thursday, so we've got a whole week to see what happens."

   Floodwater overwhelmed a pump Thursday (9/17) at Joliet refinery in 
Channahon, Illinois, resulting in an oil release into water, a filing with the 
Illinois Emergency Management Agency (IEMA) said. The flooding incident was 
reported just four days after a weekend power outage at the facility that 
triggered a site shutdown and safety flaring.

   The Joliet complex processes heavy Canadian crude oil to produce 
transportation fuels distributed across Midwest markets.

   In the Midcontinent on Thursday, Group 3 ULSD basis edged higher by 5.5cts 
to stand at a premium of 4.5cts gallon against the benchmark contract.

   Aviation fuels also strengthened across the region. Chicago jet fuel basis 
gained 10cts on the day to stand at a 70cts gallon discount to October ULSD 
futures, while Group 3 jet fuel basis rose 13cts to a 77cts gallon discount.

   The rally in Midwest ULSD unfolded despite a latest weekly rise in regional 
distillate inventories. EIA data showed PADD 2 stocks of the product rose 
300,000 bbl during the week ended Sept. 11 to 28.8 million bbl, while jet fuel 
inventories also grew 300,000 bbl to 28.8 million bbl as refinery crude 
utilization slipped 2.6 percentage points to 99%.

   In Thursday's session, October NYMEX ULSD eased 13.26cts, or 2.52%, to 
finish at $5.1139 gallon after bottoming at $5.0046 gallon during the session.

    

   ExxonMobil's Joliet Reports Flood Impact After Power Outage

   Floodwater overwhelmed a pump Thursday (9/17) at ExxonMobil's 275,000 bpd 
Joliet refinery in Channahon, Illinois, resulting in an oil release into water, 
a filing with the Illinois Emergency Management Agency (IEMA) said. 

   The incident was reported just four days after a weekend power outage at the 
facility that triggered a site shutdown and safety flaring,

   In the latest filing, ExxonMobil said it deployed a containment boom as part 
of cleanup efforts. No evacuations or assistance from state agencies were 
required.

   The Joliet refinery accounts for above 6% of Midwest refining capacity, 
based on Energy Information Administration data, and is an important supplier 
of gasoline and diesel to the Chicago and broader Midwest markets.

   DTN reached out to ExxonMobil for additional details but did not get an 
immediate response.

    

   Analysis: Diesel Margins Prolong Summer Refining Season

   Domestic crude oil demand is at the seasonally highest in seven years as 
U.S. refiners are chasing sky high diesel margins amid a pronounced global 
refined fuels supply tightness. Refiners utilized nearly 97% of operable 
capacity last week, compared to around 93% this time last year and just above 
92% post-Labor Day in 2024, U.S. Energy Information Administration data 
released Wednesday (9/16) showed.

   While easing from their post-COVID record of nearly 17.6 million bpd set a 
week earlier, net crude oil inputs were the highest for the corresponding 
reporting week since September 2018. Back then, however, operable capacity was 
close to 600,000 bpd above current levels, revealing just how hard refiners 
have been running this season.

   Measured against available capacity, in fact, utilization rates haven't been 
this high for this time of year in almost three decades. Over the past four 
weeks, they clocked in at 97.5%, compared to the five-year seasonal average of 
91.6% and the ten-year average of 90.2%. The gap to 2018 levels, meanwhile, has 
started to grow, pointing to continued maintenance deferrals amid record-high 
export demand.

   Refined product exports from the U.S. have for the past months run around 1 
million bpd, or 15%, above year-ago levels. In recent weeks, diesel exports 
alone recorded a more than 400,000 bpd year-on-year increase, reflective of a 
global middle distillate supply dearth rivaling the one in 2022 that was 
sparked by large-scale sanctions on Russian oil and product exports.

   Asian refiners have since the Hormuz crisis been running at reduced rates 
due to a combination of lack of crude oil availability and price-induced demand 
destruction. In addition, fuels exports from the Persian Gulf have during this 
time oscillated between near zero and 25% of ante-bellum levels, with war 
damages to refineries keeping these flows low despite an increasingly porous 
shipping blockade.

   Accumulating refinery disruptions in Russia, meanwhile, have offset a 
substantial portion of the effects of the last two months of rising global 
refining activity elsewhere, as evidenced by the trajectories of fuel 
inventories worldwide. In the U.S., distillate fuel oil stocks have started to 
recover from their mid-August trough of 103.4 million bbl, but are at currently 
107.9 million bbl still trailing the five-year seasonal average by 12.5%.

   Outage risk mitigation and non-deferrable maintenance aside, U.S. refiners 
continue to lack any incentive to pump the brakes. ULSD cracks have since 
mid-June found themselves on a precipitous rise dwarfing the one four years ago 
in both size and duration, and have since mid-July been more than twice as high 
as in late February before the start of the U.S.-Israeli war on Iran. Just 
yesterday (9/16), the price difference between NYMEX-traded WTI and ULSD 
front-month contracts settled at an all-time high $117.923 bbl.

    

   EIA: US NatGas Storage Reports 44 Bcf Weekly Injection

   Energy Information Administration data released midmorning Thursday (9/17) 
show a 44 billion cubic feet injection into U.S. natural gas storage to 3.298 
trillion cubic feet in the week ended September 11. Natural gas in U.S. storage 
is 3.6% lower than last year and 3.7% above the five-year average of 3.18 Tcf.

   Regionally, EIA reports the East registered a 22 Bcf injection to 795 Bcf, 
2.2% more than a year ago and 5.7% higher than the five-year average.

   Natural gas in storage in the Midwest increased 26 Bcf week-on-week to 934 
Bcf, a 2% surplus compared to the same week a year ago and 3.9% higher than the 
five-year average.

   Mountain region natural gas in storage increased 2 Bcf, down 7.3% 
year-on-year to 7.6% above the five-year average.

   South Central storage fell 5 Bcf to 1039 Bcf, 11.2% less than in the same 
week last year and 0.2% below the five-year average.

    

   Gasoline Racks Retreat 5.78cts; ULSD Holds Firm

   U.S. wholesale gasoline rack prices fell across all five PADDs Thursday 
(9/17), while ultra-low sulfur diesel (ULSD) held nearly unchanged nationally 
as crude oil and refined-product futures retreated on easing concerns over 
immediate Middle East supply disruptions.

   Nationwide conventional unleaded gasoline rack prices averaged $3.5476 
gallon, down 5.78cts from Wednesday's $3.6054 gallon, according to DTN data.

   ULSD rack prices averaged $5.5739 gallon, up 0.11ct from the previous 
trading session's $5.5728 gallon.

   The weaker gasoline market followed a pullback in energy futures as reports 
that Saudi Arabia had established alternative crude export routes through 
ship-to-ship transfers near Oman helped ease some concerns over the loss of its 
East-West pipeline. NYMEX WTI traded near $100.32 bbl Thursday morning after 
slipping below $100 earlier in the day for the first time since Friday.

   Downstream, front-month NYMEX ULSD fell about 16cts to $5.0875 gallon, while 
RBOB gasoline dropped more than 6cts to around $3.4187 gallon. Diesel refining 
margins also eased from record levels, with the diesel crack falling more than 
$5 but remaining above $112 bbl after reaching an all-time high of $117.92 bbl. 
The gasoline crack held above $42 bbl.

   ULSD racks were mixed across regions. Rocky Mountain values posted the 
largest increase, rising 5.72cts to $5.6574 gallon, followed by Midwest prices, 
which increased by 4.68cts to $5.6062 gallon. East Coast ULSD was nearly 
unchanged at $5.3971 gallon, while Gulf Coast values fell 4.20cts to $5.3870 
gallon and West Coast prices declined 2.84cts to $6.1087 gallon. PADD 5 
maintained the widest premium to the national average at 53.48cts, while PADD 3 
held the largest discount at 18.69cts.

   Gasoline racks fell across all five PADDs. East Coast values posted the 
largest decline, dropping 10.76cts to $3.3268 gallon, followed by Gulf Coast 
prices, which fell 4.64cts to $3.3767 gallon. Midwest gasoline declined 3.68cts 
to $3.4365 gallon, West Coast values fell 2.48cts to $4.2201 gallon and Rocky 
Mountain prices slipped 1.15cts to $4.1066 gallon.

   PADD 5 maintained the largest gasoline premium to the national average at 
67.25cts, while PADD 1 held the widest discount at 22.08cts.

    




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