LA Jet Fuel Basis Eases by 25cts From Record $1.10 Premium


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- The basis for prompt Los Angeles jet fuel weakened by 
25cts on Monday (4/27) to trade at an 85cts premium to May NYMEX ULSD futures, 
DTN data showed, in the first notable pullback after a historic run-up in West 
Coast jet values.

   An extraordinary rally last week pushed Los Angeles jet fuel into 
triple-digit territory for the first time on record, leaving the basis at $1.10 
gallon premium to NYMEX ULSD as of Thursday (4/23) -- prior to Monday's 
pullback.

   Notwithstanding the latest ease in jet fuel's value, market participants 
expect tightening refinery capacity to drive the market in the near term.

   The West Coast refining system is under pressure from existing and impending 
processing plant closures. The shutdown of Phillips 66's 139,000 bpd Los 
Angeles refinery earlier this year, along with the planned closure of Valero's 
145,000 bpd Benicia refinery later this month, has removed significant 
production from the regional system, leaving supply vulnerable to sharp price 
swings even as demand remains relatively steady.




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