Group 3 V-Grade Down 5cts as Volatility Persists

DAVENPORT, FL (DTN) — Midwest gasoline basis in the Group 3 market weakened Tuesday (3/17), though declines were more measured than expected as broader energy markets remained highly volatile, driven by continued swings in crude and refined product futures.

Group 3 V-grade suboctane gasoline was assessed at a 60.50cts discount to April NYMEX RBOB futures, down 5cts from the previous session, while conventional unleaded gasoline traded at a 27.5cts discount, also weakening by 5cts, according to DTN data.

In other Midwest hubs, Chicago CBOB was assessed at a 40cts discount, while barrels moving through the Buckeye Complex and Wolverine pipeline were both assessed at a 31cts discount, with all three locations declining by 3cts on the session.

“Basis adjustments have become more difficult in recent weeks given the volatility in futures markets,” a source familiar with the Midwest gasoline market said. “There’s still a high level of uncertainty around replacement costs as flat price continues to move sharply.”

In the futures market, the April RBOB gasoline contract settled at $3.1234 gallon, up 12.39cts on the session, reflecting continued volatility across the energy complex.

Midwest gasoline inventories declined by 1.1 million bbl to 60 million bbl in the week ended March 6, the lowest level since late January, according to EIA data released Wednesday, with some rack sellers reporting limited product availability.

At the same time, PADD 2 rack prices fell sharply on the day, dropping 29.17cts to $3.3710 gallon, highlighting the continued disconnect between tightening prompt supply signals and futures-driven price movement.