Midwest ULSD Premiums Talked at $0.9750 vs NYMEX


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The basis for ultra-low sulfur diesel (ULSD) climbed 
across the Midwest on Tuesday (5/12) to stand at a common premium of 97.5cts 
gallon over NYMEX ULSD for June, extending their recent higher trend amid 
concerns of tightening supply.

   ULSD basis for Chicago and the Wolverine pipeline system climbed 7.5cts each 
on the day, while the differential for the Buckeye Storage Complex alone jumped 
17.5cts from the prior session, according to data from traders monitoring the 
moves.

   For Chicago ULSD, it was the highest premium, overwriting the previous peak 
of 78.5cts gallon on May 1. For  Buckeye and Wolverine, the prior peak was 
83cts gallon, also seen on May 1.  

   Buyers have been paying large premiums since last week for Midwest ULSD on 
fears of a near-term squeeze in diesel supply after U.S. Energy Information 
Administration (EIA) data showed a weekly drop in stockpiles.

   The basis for Group 3 jet fuel, meanwhile, rose by a minus 3cts on the day 
to stand at a discount of 10cts gallon over NYMEX ULSD for June as demand for 
that product weakened versus diesel.

   The EIA reported on Wednesday (5/6) that distillate fuel oil inventories in 
the Midwest dropped by 1 million bbl to 24.9 million bbl during the week ended 
May 1.

   Despite the weekly decline, PADD 2 distillate balances remained slightly 
above the 24.7 million bbl reported in the same week of the previous year, the 
EIA data showed.

   The basis for Group 3 jet fuel, meanwhile, rose by a minus 3cts on the day 
to stand at a discount of 10cts gallon over NYMEX ULSD for June as demand for 
that product weakened versus diesel.

   Jet fuel inventories in the Midwest increased by 100,000 bbl to 7.2 million 
bbl and were above the 6.7 million bbl recorded in the same week last year.




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