MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News June 1st:

Updated at 5:00 PM ET 

HEADLINES:

— Buckeye, Wolverine ULSD at Merc Parity Amid Balanced Flows

— LA Jet Fuel Opens June Higher by 5cts on Refinery Constraints

— USGC Prices Mixed in May, Gasoline Rises, Distillates Fall

— USWC Fuel Oil Prices Rise on Refinery Closures in May

— PNW Sub Oct Reg Basis Falls 7cts on Lower Offers

— California Trims Carbon Permits; Refiners Get $4B Relief

NEWS:

Buckeye, Wolverine ULSD at Merc Parity Amid Balanced Flows

The basis for ultra-low sulfur diesel (ULSD) on both the Buckeye Storage Complex and Wolverine Pipeline rose to parity with July NYMEX ULSD Monday (6/1) as Midwest fuel supplies appeared to stabilize from recent volatility.

The ULSD basis for Buckeye and Wolverine flipped from Friday’s discount of 14cts gallon. The last time they were at parity with the NYMEX benchmark was on May 22.

The rise in their differentials, however, appeared limited by Monday’s rally in July NYMEX ULSD, which came as energy futures responded to the latest developments tied to the Iran war.

 Still, the recovery indicated the cash market’s reading of regional middle distillate inventories as balanced with demand, and that pipeline space allocations were flowing without transit friction.

Chicago ULSD, meanwhile, remained at a discount of 16cts gallon on Monday, narrowing by just 1cts over the prior day amid varying supply-demand dynamics across the Midwest.

On the PADD inventory front, distillate fuel oil stocks fell by 200,000 bbl to 23.6 million bbl during the week ended May 22, the U.S. Energy Information Administration reported Thursday (5/28).

LA Jet Fuel Opens June Higher by 5cts on Refinery Constraints

MIAMI, FL (DTN) – Prompt Los Angeles jet fuel basis strengthened Monday (6/1), with spot values climbing despite higher regional inventories and imports as refinery closures continued to limit West Coast fuel production ahead of the summer travel season.

Los Angeles jet fuel basis opened June on firmer footing, trading at a 13cts premium to July NYMEX ULSD futures on Monday (6/1), up by 5cts from the previous assessment as refinery constraints continued to support West Coast middle distillate markets.
The market has remained volatile in recent weeks. Earlier in May, Los Angeles jet fuel basis surged by 15cts to a 60cts premium after rebounding from a sharp correction that followed the record $1.10 gallon premium reached in late April, the highest level ever recorded for the market.
According to U.S. Energy Information Administration data for the week ending May 22, jet fuel inventories in the West Coast region climbed by 200,000 bbl to 10.8 million bbl from 10.6 million bbl the previous week and were 200,000 bbl higher than the same week last year.
PADD 5 jet fuel imports increased by 1,000 bpd to 13,000 bpd during the profiled week and were 10,000 bpd higher than the same period last year, EIA data showed.

USGC Prices Mixed in May, Gasoline Rises, Distillates Fall

U.S. Gulf Coast refined product prices posted mixed performance in May, with gasoline strengthening on seasonal demand, while distillates weakened as rising utilization boosted supply. Ongoing uncertainty surrounding also weighed on distillate bearish sentiment, limiting upside despite broader geopolitical risk.

Gasoline prices in the region moved higher during May, diverging from diesel and jet fuel markets despite tightening product inventories.

CBOB gasoline spot prices rose 23.50cts gallon to an average of $3.3118 gallon in May, 70.19% higher than $1.9459 gallon reported in the same period last year.

Gasoline inventories in the region fluctuated through May, posting one weekly build, two consecutive draws, and a final increase.

According to the latest Energy Information Administration (EIA) inventory report, gasoline inventories stood at 81.1 million bbl in the week ended May 22, below the 84.9 million bbl reported during the same period last year.

ULSD spot prices remained under pressure and traded at an average of $3.8320 gallon in May, down 3.37cts from April, on weak demand, and 89.77% above $2.0193 gallon a year earlier. 

Distillate fuel oil inventories fell by 1.3 million bbl to 40.3 million bbl in the week ended May 22 and were below 43.8 million bbl reported during the same week last year, EIA data showed.

Despite the decline, inventories remained above 38 million bbl — the lowest level since the week ended March 17, 2023 — recorded two weeks prior.

USGC jet fuel traded at an average of $3.6013 gallon in May, down 44.63cts from April and 86.05% higher than $1.9357 gallon reported during the same period last year. The latest EIA inventory report showed jet fuel inventories increased by 1 million bbl to 15.4 million bbl in the week ended May 22 and were above the 13.4 million bbl reported during the same week last year.

Gulf Coast refiners steadily increased operating rates throughout May, with refinery utilization rising from 95.9% at the beginning of the month to 98% in the latest reporting week. Crude oil inputs reached 9.595 million bpd as refiners ramped up production ahead of peak summer fuel demand.

U.S. Gulf prices remained well above pre-war levels. From the start of the Iran war on February 28 to May 29, Gulf Coast gasoline spot prices climbed 43%, diesel prices rose 41% and jet fuel increased 33%, according to DTN data.

The elevated price structure reflected persistent geopolitical risk premiums in global energy markets and robust international demand for Gulf Coast barrels. Heightened concerns over potential disruptions to trade flows through the Strait of Hormuz increased the importance of alternative supply sources, supporting export demand from Europe and Asia.

Looking ahead to June, Gulf Coast refined product prices could remain under pressure from strong refinery production and seasonally rising fuel output.

However, gasoline and distillate inventories remain below year-ago levels, while strong export demand and refinery utilization rates already near maximum operating rates could limit the market’s ability to absorb unexpected supply disruptions. Any refinery outage, hurricane-related disruption or escalation of geopolitical tensions could quickly tighten balances and support prices despite the recent decline.

USWC Fuel Oil Prices Rise on Refinery Closures in May

U.S. West Coast fuel oil prices remained high through May, reflecting major refinery closures and planned turnarounds in April, coupled with firm demand ahead of the summer driving and travel season.

The steepest increases were seen in the Los Angeles market following refining production shutdowns and planned turnarounds in recent months. Los Angeles CARBOB regular spot prices traded at an average of $3.90 gallon in May, a 4% increase from April and 61% higher versus the same month of the prior year.

The strength in U.S. West Coast gasoline prices was driven by limited inventories reported by the Energy Information Administration for three consecutive weeks in May. Gasoline stocks declined by 1 million bbl to 26.9 million bbl during the week ended May 22, after falling the prior week. Year-over-year, gasoline stocks were 300,000 bbl lower than the same week last year.  the EIA said.

On distillates, San Francisco ultra-low sulfur diesel (ULSD) reported the highest increase of the month after reaching a 61.25cts premium to NYMEX ULSD futures on May 20 before falling to a 40cts premium on May 27 as the market rolled into the July contract and buying interest softened.

Meanwhile, jet fuel spot average prices in Los Angeles climbed to $4.15 gallon in May of this year, doubling the price recorded in the same month of 2025.

The loss of refining capacity across California pushed higher spot prices in the U.S. West Coast. Valero ceased refining operations at its 145,000 bpd Benicia refinery in April 2026, while Phillips 66 had already shut its 139,000 bpd Los Angeles refinery by the end of 2025. Together, the closures removed roughly 284,000 bpd of refining capacity from California’s fuel system, reducing regional supply flexibility for the summer.

The refinery closures coincided with seasonal demand growth as California and the broader West Coast prepared for the summer driving season and increased air travel demand. Traders said concerns over maintaining adequate gasoline, diesel and jet fuel supplies through the summer months continued to support prompt basis values despite periodic inventory builds and increased imports.

Looking ahead, the West Coast is expected to continue facing higher prices amid supply constraints, the transition to more expensive summer-grade gasoline, and expectations of strong buying interest ahead of the summer driving season.”

PNW Sub Oct Reg Basis Falls 7cts on Lower Offers

Pacific Northwest Sub Octane Regular basis weakened Monday (6/1), falling from last week’s sharp rally as selling interest emerged and the market eased from elevated levels.

PNW Sub Octane Regular basis fell by 7cts to  30.5cts premium to July NYMEX ULSD futures from Friday’s 37.5cts premium, according to DTN data.

An offer was heard at  31cts premium to July NYMEX ULSD futures, pulling the market lower after values surged last week on tight regional supply, refinery disruptions and flaring activity across the U.S. West Coast.

The decline followed a strong move higher on May 26, when bids were heard at 24cts, 30cts and last at 36cts premium, lifting the market from a previously pegged 16.5cts premium.

Despite Monday’s decline, West Coast supply concerns continue to support the broader market as traders monitor refinery operations, flaring activity and reduced regional production capacity following refinery closures and planned shutdowns.

California Trims Carbon Permits; Refiners Get $4B Relief

California is tightening its market-based carbon tax, prompting oil refiners and heavy industries to cut emissions at double the previous rate or purchase additional pollution permits.

The regulatory overhaul, taking effect September 1, accelerates the state’s cap decline by removing 118 million carbon allowances from circulation to drive an 11% annual reduction in permitted emissions through 2030, the California Air Resources Board (CARB) said in a news release Friday (5/29).

The policy change raises long-term compliance mandates for West Coast fuel suppliers, who must secure these shrinking permits to cover their greenhouse gas footprints. To mitigate the risk of immediate retail gasoline price volatility, the state is providing refiners and manufacturers $4 billion in facility upgrade subsidies and $800 million in near-term compliance relief.

“At a moment when climate policy is under attack and global economic upheaval is creating real uncertainty, this rulemaking is critically important for California,” CARB Chair Lauren Sanchez announced in the news release.

CARB is scheduled to host a public workshop this summer to begin updating compliance offset protocols as required under SB 840 of the California Global Warming Solutions Act of 2006.