MARKETWIRE ALERTS
Maria Eugenia Garcia
DTN Energy Editor
MARKETWIRE ALERTS MarketWire Afternoon News November 2:Updated at 5:30 PM ET HEADLINES:
-- CA Trades Group Urges Benicia Refinery Reopening-- Chicago ULSD Down 27.5cts as Distillates Caught in Selloff-- NYH Refined-Product Basis Rises on Futures Rollover-- CFTC: WTI Net Longs Fall to Lowest Since July-- TotalEnergies Expects Oil Demand to Fall Through 2060-- Flint Hills Corpus Christi West Reports DHT Unit Upset-- ISM: U.S. Manufacturing Expands in Oct., PMI at 55.5-- Rack Diesel Up 3.33cts, Gas 5.2cts Despite Futures Drop
NEWS:
CA Trades Group Urges Benicia Refinery Reopening
A Californian trade group urged local energy regulators on Thursday (10/29)
to work with the state's next governor to reopen Valero's idled 170,000 bpd
refinery in Benecia, San Francisco.
In its letter to the California Energy Commission (CEC), the State Building
and Construction Trades Council of California also requested the agency's
oversight to ensure no further refinery closures in the state. It urged the CEC
to review refining margin caps and minimum supply policies that had contributed
to recent closures.
The group's call comes after Valero said recently it had no plans to reopen
the Benecia plant, citing difficulties that included re-inventorying,
restaffing and turnarounds. CEO Lane Riggs said on the company's third-quarter
earnings call last week that it had received little inbound from the Trump
administration on reopening idled capacity.
California lost two refineries after the 2025 legislative and special
session, making it more reliant on imports.
The closures have left the state with 1.34 million bpd of crude refining
capacity, down 17.28% from 1.62 million bpd in 2024, CEC data shows. Product
supply in the U.S. West Coast has been considerably tight since the outbreak of
the Iran war in March that seized up global energy flows.
PADD 5 distillate stocks stood at 10.1 million bbl in the week ended October
23, down almost 19% from the pre-war high of 12.4 million bbl on February 20,
according to data from the U.S. Energy Information Administration (EIA).
California gasoline stocks of 10.1 million bbl stand about 10% below the
pre-war peak of 11.3 million on February 6, CEC data shows.
On the spot front, Los Angeles ULSD averages $5.1009 gallon currently, up
6.43cts, or 1.3%, from September averages and nearly 116% above October 2025
levels.
San Francisco ULSD is at $5.3273 gallon, up 12.70cts, or 2.44%, from
September. Portland ULSD is the only exception, down 10.28cts, or 2%, from
September at $5.0414 gallon.
Chicago ULSD Down 27.5cts as Distillates Caught in Selloff
The basis for Chicago ultra-low sulfur diesel (ULSD) more than halved Monday
(11/2), falling 27.50cts to settle at a premium of 22.5cts gallon over the
December NYMEX ULSD contract, as distillate futures were caught in a broader
energy markets selloff.
Across neighboring pipeline systems, the differential for Buckeye Complex
ULSD dropped 3cts to stand at a premium of 27cts gallon to , while Wolverine
ULSD fell 8cts to settle at a 77cts gallon premium over December futures.
Crude oil tumbled more than 7% in NYMEX trading, pulling refined products
down, as Iranian officials signaled willingness to reopen commercial transit
through the Strait of Hormuz under Qatari mediation efforts. ULSD for December
delivery closed down $0.2545, or 5.44%, at $4.4216 gallon, after testing an
intraday low of $4.3850 gallon.
NYH Refined-Product Basis Rises on Futures Rollover
New York Harbor (NYH) refined-product spot basis values strengthened Monday
(11/2) following the rollover to December NYMEX futures, with gasoline,
ultra-low sulfur diesel (ULSD) and jet fuel posting higher premiums against
their respective benchmarks.
NYH CBOB gasoline recorded the largest increase, with basis assessed at a
17cts gallon premium over December NYMEX RBOB futures, up 14.50cts from
Friday's 2.50cts premium, according to DTN Energy data.
The advance extended to distillates, where NYH ULSD basis was assessed at a
12.50cts premium to December NYMEX ULSD futures, an increase of 9.25cts from
Friday's 3.25cts premium.
Jet fuel followed a similar pattern, with its differential assessed at a
19.50cts premium over December NYMEX ULSD futures, up 5.50cts from the previous
session's 14cts premium.
The higher basis assessments followed the rollover from November to December
NYMEX futures, with the backwardated market resulting in stronger differentials
against the new benchmark.
U.S. East Coast (PADD1) distillate fuel inventories declined during the week
ended October 16, remaining near historically low levels, while gasoline
supplies also fell and jet fuel stocks increased, according to Energy
Information Administration data released last week.
Distillate fuel inventories in PADD 1 declined by 500,000 bbl to 21 million
bbl, remaining near the 19.3 million bbl reported August 28, the lowest level
since weekly records began in 1990.
CFTC: WTI Net Longs Fall to Lowest Since July
Money managers reduced their net bullish positioning in NYMEX West Texas
Intermediate (WTI) crude for a second consecutive week through October 27,
pushing net longs to their lowest level since mid-July as a reduction in long
positions combined with an increase in shorts.
Noncommercial long positions in WTI held by money managers fell by 4,944
contracts to 330,168 during the reference week, according to weekly Commitment
of Traders data released Friday (10/30) by the Commodity Futures Trading
Commission (CFTC).
Noncommercial short positions increased by 10,038 contracts to 255,825
during the same week, the CFTC data showed.
This caused the net noncommercial long position in WTI to fall by 14,982
contracts to 74,343, extending the previous week's 11,018-contract decline.
Open interest, meanwhile, increased by 51,136 contracts to 1,886,280.
The latest reduction brought net bullish positioning below 75,000 contracts
for the first time since mid-July, down from 141,106 contracts during the week
ended September 22, reflecting a broader retreat in speculative bullish
positioning over the past five weeks.
Noncommercial spread positions in WTI increased by 35,977 contracts to
569,060 during the same week.
Total long positions in WTI futures rose by 46,557 contracts to 1,805,665,
while total short positions increased by 48,349 contracts to 1,834,290.
TotalEnergies Expects Oil Demand to Fall Through 2060
Global oil products demand could fall significantly through 2060 as
electrification, biofuels and other low-carbon technologies expand, though
continued investment in oil production will remain necessary as existing fields
decline faster than demand, TotalEnergies said in its 2026 Energy Outlook
released Monday (11/2).
TotalEnergies forecasts global oil products demand at 101 million bpd in
2025, with significantly different trajectories emerging under its Trends,
Momentum and Rupture scenarios.
Under Trends, which assumes current policy directions, technological
developments and consumer behavior continue, oil products demand rises to 102
million bpd in 2035 before declining to 93 million bpd in 2050 and 88 million
bpd in 2060.
The decline accelerates under Momentum, a more ambitious transition scenario
in which OECD countries approach carbon neutrality by 2050 and China by 2060.
Oil products demand falls to 96 million bpd in 2035, 74 million bpd in 2050 and
66 million bpd by 2060.
Under Rupture, designed around limiting global warming below 2 degrees
Celsius, demand drops more sharply to 92 million bpd in 2035, 53 million bpd in
2050 and 39 million bpd in 2060.
Under Trends, TotalEnergies expects electrification and biofuels to cause
road transportation demand to plateau by 2040, while aviation and petrochemical
demand continues to grow.
Petrochemicals represent 15% of oil products demand in 2025 but rise to 33%
by 2060 under Rupture.
Flint Hills Corpus Christi West Reports DHT Unit Upset
Flint Hills Resources reported Monday (11/2) an operational upset involving
the diesel hydrotreater (DHT) unit at its 268,500 bpd Corpus Christi West
refinery in Texas, resulting in a flaring that marked the facility's third
emissions incident in under three weeks.
The incident occurred Sunday (11/1) from approximately 9:11 a.m. to 9:57
a.m. CT, lasting 46 minutes, according to the report filed with the Texas
Commission on Environmental Quality (TCEQ).
The refinery experienced estimated emissions of 531 pounds of sulfur dioxide
through its first-stage flare system, the filing said.
Flint Hills added that personnel at the scene initiated measures to assess
and minimize emissions following the unit upset. Downwind air monitoring
detected sulfur dioxide concentrations of 0.2 parts per million (ppm), while
readings for carbon monoxide, hydrogen sulfide and volatile organic compounds
were zero.
The DHT unit removes sulfur from diesel fuel to meet ultra-low sulfur diesel
specifications. The filing did not specify the cause of the upset or indicate
whether diesel production was affected.
The latest event follows an October 27 release that prompted the shutdown of
the refinery's DDS unit, resulting in estimated emissions of 1,050 pounds of
sulfur dioxide. Prior to that, on October 13, the flare gas booster compressor
area experienced another incident that resulted in flaring and an estimated 316
pounds of sulfur dioxide emissions.
Flint Hills said the remissions and event duration reported in the latest
event are preliminary and may be revised in its final filing.
ISM: U.S. Manufacturing Expands in Oct., PMI at 55.5
A key U.S. purchasing managers index released on Monday (11/2) showed that
manufacturing activity in October expanded for the 10th consecutive month,
continuing a sustained period of growth in the sector.
The Manufacturing Purchasing Managers Index of the Institute for Supply
Management (ISM) stood at 55.5% in October, up 1 percentage point from the
September figure of 54.5%. The overall economy continued in expansion for the
24th consecutive month.
The reading extended a broad and sustained recovery. A Manufacturing PMI
above 47.5%, over a period of time, generally indicates an expansion of the
overall economy.
New orders expanded for the 10th consecutive month after four straight
readings in contraction, with the New Orders Index edging up 0.2 percentage
point from September, registering 55.5% versus 55.3% the prior month. The
Production Index came in at 59%, up 2.3 percentage points from September's
56.7%, marking expansion for the 12th consecutive month and the highest reading
since November 2021.
The Prices Index was at 75.2%, down 2.7 percentage points from September's
77.9%, remaining firmly in expansion territory and signaling continued upward
pressure on input costs. The Backlog of Orders Index registered 54.6%, down 1.8
percentage points from September's 56.4% reading, while the Employment Index
fell 0.3 percentage point to 52.4%, still indicating expansion.
"In October, U.S. manufacturing activity remained in expansion territory,"
said Susan Spence, chair of the ISM Manufacturing Business Survey Committee. Of
the five subindexes that make up the PMI, four -- New Orders, Production,
Supplier Deliveries and Inventories -- grew faster than the previous month,
while Employment growth slowed by 0.3 percentage point.
The Supplier Deliveries Index indicated slowing supplier performance for the
11th consecutive month, rising 0.1 percentage point to 59.1%. The Inventories
Index registered 51.4%, returning to expansion and rising 2.8 percentage points
from September. The Imports Index increased 1.9 percentage points to 52.9%,
while New Export Orders edged up 0.3 percentage point to 51.2%.
Sentiment among respondents turned more cautious in October. Some 66% of
comments were negative and 34% positive -- a ratio of 2-to-1. Among negative
comments, pricing volatility was cited in 62%, longer lead times in 41%,
tariffs in 25%, and the Iran war in 21%.
On the supply side, 6% of the manufacturing sector's GDP contracted in
October, up from 2% in September, with 6% of manufacturing GDP falling into
strong contraction, defined as a composite PMI of 45% or lower, compared with
2% in September.
Rack Diesel Up 3.33cts, Gas 5.2cts Despite Futures Drop
U.S. wholesale rack prices for ultra-low sulfur diesel (ULSD) and gasoline
advanced Monday (11/2), bucking a sharp selloff in crude oil and refined
product futures as renewed diplomatic efforts between Washington and Tehran
raised expectations of easing Middle Eastern supply disruptions.
Nationwide ULSD rack prices increased 3.33cts to $5.2503 gallon from
Friday's revised $5.2170 gallon, according to DTN data. Conventional unleaded
gasoline rose 5.2cts to $3.1889 gallon from $3.1369 gallon.
Oil futures came under pressure early Monday following reports that the
United States and Iran were exploring diplomatic options to end the Middle East
conflict. The prospect of negotiations reduced some of the geopolitical risk
premium built into petroleum prices, although threats to regional energy
infrastructure and shipping routes, along with the ongoing war in Ukraine,
continued to cloud the global supply outlook.
WTI futures plunged $4.57 to $99.55 bbl, falling below the $100 threshold,
while NYMEX ULSD dropped 17.24cts to $4.5037 gallon. RBOB gasoline futures
declined 1.68cts to $2.9885 gallon.
Refining margins extended their recent retreat, with the diesel crack
falling $2.67 to $89.62 bbl, widening its decline from levels above $100 bbl
earlier last week. The gasoline crack dropped $2.48 to $25.93 bbl, reflecting
additional pressure on refining economics despite stronger wholesale rack
prices.
ULSD rack prices increased across all five PADDs, led by the Rocky
Mountains, where prices climbed 5.81cts to $5.5765 gallon. Gulf Coast diesel
rose 5.06cts to $5.0967 gallon, while West Coast prices advanced 4.24cts to
$5.6929 gallon. Midwest ULSD increased 3.65cts to $5.3278 gallon.
Gasoline racks also strengthened nationwide, with East Coast prices posting
the largest increase, up 6.83cts to $3.1079 gallon. West Coast gasoline climbed
6.53cts to $3.8474 gallon, followed by the Gulf Coast, where prices rose 5.8cts
to $3.0041 gallon.
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