West Coast Fuel Prices Set to Rise as Benicia Goes Offline
4/30 12:29 PM
West Coast Fuel Prices Set to Rise as Benicia Goes Offline Kristina Davis DTN Refined Fuels Market Reporter MIAMI, FL (DTN) -- Valero's scheduled end-April closure of its Benicia, California refinery will further tighten a West Coast processing system already short on fuel production and potentially add to surging prices of jet fuel and other products. The Benicia refinery, which used to process roughly 145,000 bpd of crude, has been taken offline through a phased approach that began earlier this year. According to the company, the process started with the idling of processing units in February while inventories were worked down ahead of the full shutdown. Valero said the idling of the Benicia facility stemmed from essential state inspections that began in February. It said gasoline output had continued to reduce inventory levels until all units were shuttered. The timing of the shutdown is proving critical for fuel markets. The West Coast refining system is already operating with reduced capacity following the closure of the 147,000-bpd Phillips 66 Los Angeles refinery earlier this year, leaving fewer facilities available to balance supply. As capacity has declined, prices have become increasingly sensitive to supply risks -- a dynamic that has been most visible in the jet fuel market. Los Angeles jet fuel prompt basis was jumped to a 95cts premium above May NYMEX ULSD futures, after reaching a historic $1.10 gallon premium earlier in April. Traders have consistently pointed to shrinking refining capacity and limited replacement supply as primary drivers behind the volatility that took West Coast jet values to triple-digit territory for the first time. With the idling at Benicia, the regional supply cushion will narrow further and reinforcing a structural shift in the West Coast fuel market. This landscape is defined by tighter supply balances and a heavier reliance on imports, raising the risk of sharp price swings for gasoline and jet fuel. (c) Copyright 2026 DTN, LLC. All rights reserved.
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN