Midwest Jet Basis Widens as NYMEX ULSD Soars


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Midwest spot jet fuel basis\ weakened further across 
regional hubs Thursday (7/23), as cash discounts expanded under the weight of a 
massive rally in underlying futures markets.

   Group 3 jet fuel experienced a sharp basis decline, talked at a discount of 
50cts gallon to the August NYMEX ultra-low sulfur diesel (ULSD) futures 
contract. The daily widening of 21cts pushed cash differentials significantly 
lower, pointing to localized physical pressure and buyer resistance across the 
southern tier of the Midcontinent.

   Chicago jet fuel also saw its basis slide further into negative territory, 
talked at an 85cts gallon discount to the August NYMEX ULSD contract. The 3cts 
daily widening extends a multi-session weakening trend in the Chicago cash 
market, as local spot demand continues to lag behind surging energy futures.

   The softer cash market occurred even as futures prices surged dramatically 
across the petroleum complex. August NYMEX ULSD futures surged $0.2150 to 
settle at $4.3416 gallon. The rally in diesel futures tracked Thursday's 
two-month highs in crude futures, with September ICE Brent peaking at $102 and 
WTI hitting $93.50.

   Mounting geopolitical risks continue to fuel flat-price gains across energy 
markets, with escalating threats to maritime transport in critical waterways 
tightening the outlook for global middle distillates.

   In the Midwest, underlying physical supply flexibility remains constrained 
by ongoing labor disruptions at BP's 440,000 bpd Whiting refinery, even as 
regional cash discounts broaden against the futures rally.




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