MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for March 27th:

Updated at 5:00 PM ET 

HEADLINES:

— USGC Jet Fuel Basis Reaches an All Time-High

— PNW ULSD Basis Reach 5-Mo High, Spikes by 25cts on Demand

— Chicago Jet Basis Flips to Premium, Hits 5-Mo High

— CFTC: Speculators Boost WTI Longs in Brief Return to $100

— Analysis: WCS-WTI Gap Could Narrow for Midwest Refiners

— Baker Hughes: Weekly North America Rig Count Down by 33

— ICE Reports Record Volumes in Brent, Energy for March

NEWS:

USGC Jet Fuel Basis Reaches an All Time-High

The basis of jet fuel at the Houston origin of the Colonial pipeline in the Gulf Coast spot market surged by 38cts to a 52cts premium over May ULSD futures on the New York Mercantile Exchange Friday (3/27), driven by supply tightness and high export demand.

Bids and offers for USGC jet fuel were heard at 50cts gallon and 52cts gallon, respectively, on the day while trades were talked at around 51.75 gallon and 52cts. This is the first time jet fuel spot prices in the U.S. Gulf Coast have reached an all- time high, according to DTN data.

Diesel and jet prices in the USGC have faced extreme upward pressure due to high export demand tied to supply tightness caused by the Iran war and production issues at Valero’s 435,000 bpd Port Arthur refinery, which reported an explosion on Monday (3/23).

USGC diesel basis was assessed on Friday at a 3.50cts discount below the NYMEX ULSD futures contract for May delivery, 1.50cts down from the prior session.

“All I’ve seen is the seesaw on diesel, up 23cts, down 32cts, up 26cts and down 12cst. With prices changing a couple of times a day, we are bringing in product at a higher price than we are selling it,” a Houston-based diesel seller said.

PNW ULSD Basis Reach 5-Mo High, Spikes by 25cts on Demand

Pacific Northwest ultra-low sulfur (ULSD) basis surged by 25cts on Friday (3/27) to a 35.5cts premium over May NYMEX ULSD  futures contract, hitting a five-year high on firm buying interest amid supply tightness.

Bids for PNW ULSD basis were heard in the market at a 35ct premium, with no trades confirmed at that level. The assessment was the highest since October 24,2025 when it was at 34.5cts premium over front-month NYMEX ULSD, according to DTN data.

The move was driven by firm demand, with the basis pegged at a 10.5cts premium to May futures contract in the previous trading session on Wednesday (3/26).

Upward pressure on the  USWC refined fuel market is driven by supply disruption in the Strait of Hormuz as regional refiners import Middle East crudes and refining production has been limited.

Refinery closures are contributing to the tightness in the market, following the shutdown of Valero’s 145,000 bpd Benicia, California,  refinery in late 2005 and the upcoming closure of 139,000 bpd Phillipps 66 Wilmington refinery in April. 

Chicago Jet Basis Flips to Premium, Hits 5-Mo High

Chicago jet fuel basis hit a 5-month high Friday (3/27), after climbing by 46cts to a 5cts premium over May NYMEX ULSD futures – flipping from a 41cts discount recorded the prior session -on firm distillates demand and higher Gulf Coast pricing.

Jet fuel basis in Chicago traded to a premium to front-month NYMEX ULSD futures for the first time since November 11, 2025, when it was assessed at a 1ct premium, DTN data showed. The move marks the highest level for 2026 and a sharp rebound of roughly 70cts from the year’s low on March 18.

“Chicago is just getting dragged higher by the Gulf right now,” a source familiar with Midwest refined product trading said. “With USGC set on export economics and cracks this strong, Midwest has to reprice or it risks losing barrels.”

Front-month ULSD futures have rallied significantly, climbing from $2.5960 on Feb. 27 to $4.5277 in recent trade, supported by escalating tensions tied to the U.S.-Israel-Iran conflict that has lifted broader middle distillate values. Distillate crack spreads have also surged, with the prompt crack trading above $90 bbl, the highest level since early April 2022.

Market participants said stronger Gulf Coast pricing tied to export demand is effectively setting the marginal value for distillates, forcing inland markets like Chicago to bid higher to retain supply and remain competitive within the broader distillate market.

CFTC: Speculators Boost WTI Longs in Brief Return to $100

Bullish bets in NYMEX West Texas Intermediate (WTI) crude rose during the week to March 24 as futures of the U.S. oil benchmark briefly returned to above $100 bbl against the backdrop of the Iran war, Commodity Futures Trading Commission (CFTC) data showed Friday (3/27).

Speculative net longs in gasoline and distillate, meanwhile, indicating a less bullish position. Natural gas futures saw a decline in net shorts, signaling speculators were less bearish there.

In WTI, noncommercial long positions fell by 9,618 contracts to 376,150, the CFTC said in its weekly Commitment of Traders report for the week ended March 24. Noncommercial short positions fell by 24,550 contracts to 142,530.

This caused net noncommercial longs in WTI to grow by 14,932 to 233,620. Open interest in WTI fell by 79,511 contracts to 2,002,065.

Those moves came as the front-month contract in NYMEX WTI rose to a session high of $101.48 bbl on March 23, a day before CFTC closed its review of trader positions for the week.

In NYMEX RBOB gasoline futures, noncommercial long positions fell by 6,526 contracts to 92,274, while short positions rose by 223 contracts to 22,428. This caused the noncommercial net long position to shrink by 6,749 contracts to 69,846.

Open interest in gasoline was down by 25,479 contracts to 355,100.

In NYMEX ULSD futures, noncommercial long positions fell by 5,527 contracts to 37,342, while short positions rose by 337 contracts to 27,775. These changes caused the noncommercial net long position in ULSD to shrink by 5,864 contracts to 9,567.

Open interest in ULSD fell by 11,042 contracts to 255,642.

In NYMEX natural gas futures, noncommercial long positions fell by 6,721 contracts to 210,159 while short positions declined by 12,143 to 382,766. That caused the net short position in natural gas to shrink by 5,422 contracts to 172,607.

Open interest in natural gas fell by 56,239 contracts to 1,504,052.

Analysis: WCS-WTI Gap Could Narrow for Midwest Refiners

Shifts in global crude flows triggered by the Strait of Hormuz blockade could narrow the Western Canada Select discount to the West Texas Intermediate, impacting Midwest refiners who particularly rely on Canadian crude.

The WCS-WTI gap hovers at around $13.50 bbl, recovering from the March 2 low of $12.70 bbl reached after the outbreak of the Iran war on February 27.

The difference could shrink again if WCS exports to Asia gain traction as Chinese refiners, especially, seek alternatives to Middle East heavy sours trapped by the Hormuz blockade.

In fact, higher exports to Asia were one reason for the sharp narrowing of the WCS discount to WTI over the past two years, the Montreal Economic Institute (MEI) observed in a March 26 report.

With the launch of the Trans Mountain Expansion pipeline in May 2024, Canadian crude exports to Asia surged from virtually zero to over $3 billion by the fourth quarter of 2025, the institute noted. It said the WCS-WTI gap itself shrank by 37.5% in the 18 months following the pipeline’s completion compared to the 18 months prior, to stand at about $12.50 bbl now from nearly $20 previously. 

“Indeed, (export) diversification led to relatively higher prices for WCS than before, and thus to a smaller gap with the price of a barrel of WTI,” the MEI added. “The full effect of diversification will undoubtedly only be felt over time.”

Calm Before Storm?

Midwest fundamentals remain stable for now. PADD 2 distillate inventories stood at 30.591 million bbl during the week ended March 20, down about 7% on the year, the U.S. Energy Information Administration reported. Weekly refinery utilization held at 90%, little changed from 89.5% a year ago.

Local product markets also point to a futures driven move rather than a tightening physical balance. Chicago ULSD was assessed at a 93cts discount to front-month futures on March 27, compared with a 15.5cts discount in the same session last year, while Group 3 traded at a 92cts discount versus a 1.75cts discount a year earlier.

At the same time, NYMEX ULSD futures have surged, with the April contract settling at $4.4955 gallon on March 27, up nearly 105% from $2.1980 gallon a year earlier, indicating flat prices have outpaced any tightening in Midwest cash markets.

Lower stocks can reduce the buffer if demand strengthens, but steady refinery runs and ongoing pipeline inflows indicate no immediate supply constraint.

The Midwest impact, if it develops, is likely to be gradual. Rather than losing access to crude, PADD 2 refiners would face higher feedstock costs as Canadian barrels become more competitive in global markets.

“This hasn’t shown up in Midwest balances yet, but it’s something the market is watching,” a source familiar with the region said. “If those barrels start moving west and the WCS discount tightens, that’s when refiners here start to feel it.”

Baker Hughes: Weekly North America Rig Count Down by 33

North American energy drilling activity tumbled by 33 rigs this week, adding to the prior week’s 21-rig decline, according to Baker Hughes’ weekly report released Friday (3/27).

The report shows the regional rig count at 696 in the current week, compared to 729 recorded the previous week.

Rigs for Canada and the U.S. combined were lower than the 755 actively deployed in the same week of last year.

As with recent trends, this week’s change was largely driven by Canada, where rigs fell by 24 to reach 153.

The balance nine rigs in deficit came from the U.S., where the count fell this week to 543 from a prior 552. A year ago, U.S. rigs stood at 592.

This week in the U.S., rigs in inland waters were unchanged at two, while offshore rigs dipped by one to 11. Rigs on land fell by eight to 530.

By trajectory, directional rigs in the U.S. slid by six to 47. Horizontal rigs fell by five to 482 while vertical rigs rose by two to stand at 12.

ICE Reports Record Volumes in Brent, Energy for March

Intercontinental Exchange (ICE) has reported record trading in energy futures for March amid the Middle East conflict, with volumes in global crude benchmark Brent hitting all-times as market participants tried to hedge price risks.

Brent crude futures and options saw 8.3 million contracts changing hands this month, against the broader historic volume of 72.7 million contracts for all energy markets, ICE said in a statement.

Total oil open interest climbed to 19.8 million contracts, with record daily volumes occurring on March 3. On that date, ICE processed 9.3 million oil contracts and 1.4 million gasoil trades as volatility spiked across the complex.

Natural gas markets saw an open interest of 46.6 million contracts. North American natural gas positions accounted for 40.1 million of those contracts.