Premium Gasoline Basis in Group 3 Surges after Disruption
CRANBURY, N.J. (DTN) -- Basis for premium conventional gasoline in the
Oklahoma Group 3 spot market spiked 925 points Thursday to 27.5cts over March
RBOB futures on the New York Mercantile Exchange, as last week's disruptions to
distribution and refining activity in the Gulf Coast and Midwest tightens
available supply for the grade ahead of the transition to lower Reid vapor
pressure ratings on March 1.
Group gasoline basis has marched higher since Presidents' Day weekend after
refining activity was sharply reduced for the Texas and Oklahoma region. Market
intelligence also points to problems on the Explorer Pipeline, which runs north
from Port Arthur, Texas to Tulsa, Okla., and then northeast to Hammond, Indiana.
Conventional gasoline in the Chicago market also strengthened against CBOB,
with the Chicago spot market today trading for first cycle March pipeline
deliveries and April futures indexing. There's an 8.4cts carry in the prompt
futures spread with one session remaining for the March contract before
expiration. Chicago CBOB is now indexed at a 13cts discount to April futures
and conventional premium at a 9.5cts premium to the April screen, with
premium's regrade against CBOB widening 450 points.
Energy Information Administration on Wednesday reported the fourth straight
draw in PADD 2 Midwest gasoline stocks to a 53.6 million bbl five-week low as
of Feb. 19, with inventory falling 1.9 million bbl or 2.9% in February. Midwest
gasoline stocks are down 5.479 million bbl or 9.3% against the comparable week
a year ago.
PADD 2 gasoline output dropped 229,000 bpd or 10% last week to 2.068 million
bpd according to EIA data, the lowest processing rate since late May 2020,
while down 368,000 bpd or 15.1% against year ago and the three-year average.
Brian L. Milne, 1.402.255.8020, firstname.lastname@example.org, www.dtn.com.
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