LA Jet Fuel Basis Spikes 13cts on ULSD Futures Rise

MIAMI, FL (DTN) — Basis for prompt Los Angeles Jet fuel surged by 13cts on Monday (3/2) to a 16cts premium over April NYMEX ULSD futures, following a rally in futures market The geopolitical risk stemming from the Middle east conflict put upward pressure on the front-month ULSD contract, which rose by 14% on the day. 

Domestic supply tightness also supported spot market prices as refining utilization in the West Coast (PADD 5) dropped to 81.1% in the week ending February 20 from 87.4% the prior week, according to most recent data from Energy Information Administration.

Declining refining rates in PADD 5 are related to the recent closure of Phillips 139,000 bpd Los Angeles, California, refinery and the upcoming shutdown of Valero’s 145,000 bpd, Benicia California, scheduled for late April.