Midwest CBOB Basis Strengthens on Tighter Spot Market


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The basis for CBOB in the Midwest strengthened Tuesday 
(5/26) against benchmark NYMEX futures as a drop in spot inventories and tight 
prompt pipeline space forced short-covering buyers to pay higher regional 
premiums.

   The basis for Chicago CBOB was at a discount of 6cts gallon to NYMEX 
gasoline for June. That discount was at 15cts gallon on Friday, prior to 
Monday's Memorial Day holiday.

   On the Buckeye Storage Complex and the Wolverine Pipeline, the CBOB basis 
was also at a minus 6cts to NYMEX gasoline to June. On Friday, Buckeye CBOB was 
at a discount of 9cts while Wolverine CBOB at 12cts.

   Spot inventories of gasoline tightened heading into the Memorial Day weekend 
as local terminals and blenders cleared out existing stocks of the product in 
anticipation of higher demand at the pumps and to make room for fresh 
production cycles. With that prompt-delivery barrels of CBOB commanded higher 
pricing from buyers looking to restock after the holidays.




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