Midwest Weekly: Jet Fuel Drops 17% as Joliet Restarts


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Chicago jet fuel plummeted nearly 17% on the week to 
lead Midwest spot fuel markets sharply lower, as basis levels pulled back 
following progress on unit restarts at ExxonMobil's Joliet refinery.

   Chicago jet fuel fell 86.57cts, or 16.88%, on the week to average $4.2636 
gallon, down from $5.1293 gallon a week ago, DTN data showed. In the 
Midcontinent, Group 3 jet fuel slid 8.07cts, or 1.88%, to average $4.2056 
gallon.

   Distillate cash markets posted broad single- to double-digit percentage 
declines across all regional distribution hubs as physical differentials 
retreated from peak spikes. Chicago ULSD dropped 53.77cts, or 9.98%, on the 
week to average $4.8486 gallon.

   Buckeye Complex ULSD fell 49.77cts, or 9.24%, to average $4.8866 gallon, 
while Wolverine ULSD retreated 50.77cts, or 9.41%, to average $4.8866 gallon. 
In the Plains, Group 3 ULSD slid 32.07cts, or 6.28%, on the week to average 
$4.7856 gallon.

   PADD 2 cash gasoline markets also posted widespread weekly losses across 
regional pipeline networks. Chicago CBOB fell 36.53cts, or 9.97%, on the week 
to average $3.3002 gallon.

   In eastern pipeline distribution channels, Buckeye Complex CBOB dropped 
34.13cts, or 9.28%, to average $3.3362 gallon, while Wolverine CBOB dipped 
17.51cts, or 4.70%, to average $3.5502 gallon. In the Midcontinent, Group 3 
CBOB fell 11.73cts, or 3.28%, on the week to average $3.4532 gallon.

   The physical pullback came as units at ExxonMobil's 275,000 bpd Joliet 
refinery in Channahon, Illinois, underwent stabilization and step-by-step 
restart procedures following a September 13 site-wide power outage and 
secondary pump flooding on September 17. The operational disruptions had 
temporarily restricted refined product flows into major Chicago distribution 
hubs, triggering extreme basis volatility.

   Supply distribution across the region also faced lingering adjustments on 
the Explorer Pipeline following an August 17 fire at its Glenpool, Oklahoma 
breakout station, which constrained batch scheduling into Wood River and 
Chicago hubs.

   The recent supply shocks were compounded by lower overall regional refining 
activity. Energy Information Administration data showed PADD 2 refiner crude 
processing dropped to 3.802 million bpd for the week ended September 18, 
pulling utilization down 11.0 percentage points to 89.0% and driving regional 
distillate fuel oil inventories down by 1.6 million bbl to a multi-month low of 
27.2 million bbl.

   Despite the recent pullback in spot values, physical traders note that 
regional supply balances remain tight as agricultural harvest demand picks up 
across the Midwest, keeping markets vulnerable to localized supply squeezes 
ahead of upcoming fall maintenance schedules.

    




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