MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News June 2

Updated at 5:50 PM ET 

HEADLINES:

–Midwest Distillates Ease as Gasoline Strengthens

–BTS: U.S. Motor Fuel Prices Increase in May

–Dallas Fed: Hormuz Crisis Wipes Out U.S. Tariff Relief

–Midwest Jet Fuels Diverge; Group 3 Basis Discount Narrows

–EIA: California Natural Gas Prices Fall to Record Lows Through May

–EIA: U.S. Diesel Down 17.3cts on Week to $5.350 Gallon

–EIA: U.S. Retail Gasoline Average Falls 17cts on Week

NEWS:

Midwest Distillates Ease as Gasoline Strengthens

Midwest distillate basis weakened Wednesday as ultra-low sulfur diesel (ULSD) and jet fuel values dropped across most pipelines while gasoline continued strengthening, signaling what could be an early seasonal shift in demand heading into the summer driving season.

Chicago ULSD basis was assessed at a 23.50cts discount to July NYMEX ULSD futures contract, weakening 7.50cts on the session. ULSD at Buckeye and Wolverine pipeline systems was assessed at a 10cts discount to the same benchmark, both easing 10cts from the prior session, according to DTN data.

Chicago jet fuel basis also weakened to a 65cts discount to July NYMEX ULSD futures, down 13cts from the prior session.

Meanwhile, Chicago CBOB basis strengthened to a 10cts discount to July NYMEX RBOB futures, rising 8cts on the day. Buckeye and Wolverine CBOB followed the same direction; both assessed a 6cts discount below the same benchmark after moving 8cts higher, according to DTN data.

Group 3 ULSD, commonly referred to as “X,” moved in the opposite direction from Midwest pipes, strengthening 2cts to a 24.50cts discount to July NYMEX ULSD futures. Group 3 jet fuel, known as “Q,” also reversed lower, assessed at a 75cts discount after weakening 10cts from the prior session. Group 3 gasoline, commonly referred to as V grade, followed the direction of Chicago, Buckeye and Wolverine and was assessed at a 17cts premium, strengthening 3cts, according to DTN data.

“There were a lot of the bigger players selling distillates today and not many buyers in the market,” a source familiar with Midwest refined product trading said. “As we head into driving season, it feels like some of the focus is starting to rotate out of distillates and into gasoline.”

The diverging moves between distillates and gasoline suggest participants may be beginning to reposition seasonally, with gasoline basis strengthening while distillates continue to ease.

BTS: U.S. Motor Fuel Prices Increase in May

Average U.S. retail motor fuel prices increased in May from the previous month and remained sharply above year-ago levels, according to data released Tuesday (6/2) by the Bureau of Transportation Statistics.

The average price for regular gasoline rose to $4.48 gallon in May, up 9.2% from April and 42.2% higher than the same month last year.

Regionally, the West Coast posted the highest average gasoline price at $5.59 gallon, while the Gulf Coast remained the lowest at $3.95 gallon. All regions reported double-digit increases compared with May 2025.

Meanwhile, average retail diesel No. 2 prices climbed to $5.60 gallon in May, increasing 1.8% month over month and standing 60% above year-ago levels.

The increase in fuel prices reflected continued pressure across transportation energy markets during the month despite regional differences in supply and demand conditions.

Dallas Fed: Hormuz Crisis Wipes Out U.S. Tariff Relief

The Middle East conflict and the shipping crisis in the Strait of Hormuz have wiped out the deflationary benefits from the U.S. Supreme Court’s outlawing of the Trump administration’s import tariffs, the Dallas Federal Reserve observed in a report published Tuesday (6/2).

While the Supreme Court decision reduced baseline costs that tempered U.S. inflationary risks, the Hormuz blockade by Iran restricted energy flows, causing severe supply chain strains that ultimately bloated costs, the Dallas Fed noted.

The regional central bank said the supply shocks had actively migrated to consumer pocketbooks, exhausting previous corporate cost buffers.

The Supreme Court’s February 20 ruling struck down a portion of U.S. President Donald Trump’s tariffs imposed under the International Emergency Economic Powers Act, effectively slashing average domestic import duties by roughly 4.8 percentage points. The legal shift was projected to give businesses major breathing room, providing a direct, structural downward push on wholesale import prices across multiple industrial sectors.

But the Hormuz blockade quickly counteracted those cost reductions, transforming the trade landscape into an intense economic tug-of-war.

The Dallas Fed warns that if the maritime chokepoint remains closed for multiple quarters, it will compress global gross domestic product growth and cement persistent upward pressure on domestic core consumer prices.

Looking ahead, the regional central bank’s predictive modeling shows that lingering shipping delays will likely complicate forward corporate inventory planning. If these energy and logistics disruptions persist, resulting supply chain spillovers could pressure monetary policymakers into maintaining a hawkish path for U.S. interest rates, analysts say.

Midwest Jet Fuels Diverge; Group 3 Basis Discount Narrows

The basis for Group 3 jet fuel narrowed sharply on Tuesday, while Chicago jet fuel differentials widened amid diverging supply dynamics across the Midwest.

Group 3 jet fuel was talked at a discount of 12.5cts gallon to the July NYMEX ULSD benchmark, recovering from Monday’s discount of 26.5cts gallon.

Meanwhile, Chicago jet fuel discounts widened to 62.5cts gallon against the benchmark, compared to a discount of 52cts gallon on Monday.

The contrasting price movements highlighted regional shifts in spot market liquidity and demand across different parts of PADD 2.

Tuesday’s price activity in Midwest jet fuel came as July ULSD on NYMEX surged, rising 5.82cts, or 1.6%, to $3.6976 gallon by 12:30 ET.  

On the supply front, regional jet fuel inventories held flat at 6.8 million bbl for the week, which remains 200,000 bbl above the 6.6 million bbl recorded during the same period last year. Midwest jet fuel imports reached 18,000 bpd during the profiled week, marking a gain of 1,000 bpd from the prior week and an 11,000 bpd increase year-on-year.

EIA: California Natural Gas Prices Fall to Record Lows Through May

California natural gas spot prices fell to record lows during the first five months of 2026 as elevated regional inventories and weaker demand from the power sector pushed prices below the national benchmark, according to analysis released Tuesday (6/2) by the U.S. Energy Information Administration.

Monthly average prices at Northern California’s PG&E Citygate and Southern California’s SoCal Border Average dropped to their lowest levels on record, while SoCal Citygate prices also moved near historic lows.

The decline comes as natural gas inventories in the Pacific region remained well above historical levels. EIA data showed regional storage inventories were 30.9% above the five-year average, or 69 billion cubic feet higher, for the week ended May 22.

At the same time, lower natural gas consumption from California’s power sector continued to pressure prices. Increased renewable generation and growing battery storage capacity reduced the need for natural gas-fired generation, particularly during evening peak demand periods.

According to EIA, California consumed a record-low 4.8 billion cubic feet per day of natural gas in 2025, down 7% from the previous year.

Historically, California natural gas hubs trade at a premium to Henry Hub because of regional supply constraints and infrastructure limitations. However, the combination of stronger inventories and softer demand resulted in California hub prices averaging below Henry Hub through the first five months of 2026.

EIA: U.S. Diesel Down 17.3cts on Week to $5.350 Gallon

The U.S. Energy Information Administration reported Monday (6/1) that retail diesel prices moved lower for a third consecutive week during the week ended June 1, with the national average easing 17.3cts to $5.350 gallon.

Compared with the same time last year, diesel nationwide was up $1.899 gallon on average.

The weekly decline was spearheaded by a 23.1cts drop in the Midwest PADD 2 region to $5.392 gallon, while the smallest retrenchment occurred in New England PADD 1A, where prices dipped just 6.8cts to $5.731 gallon.

These regional adjustments come as robust refinery utilization rates in the nation’s midsection outpaced localized supply constraints and sluggish spring demand in the Northeast.

East Coast diesel prices fell 15.7cts to $5.237 gallon for the week ended June 1. This PADD 1 region showed a $1.720 gallon increase compared with the same period last year.

The Central Atlantic witnessed an 11.6cts decrease on the week. Prices in the PADD 1B region averaged $5.694 gallon, rising $1.928 compared with the previous year.

Diesel prices in the Lower Atlantic averaged $5.016 gallon. This PADD 1C region reflects an 18.5cts decrease on the week and a $1.632 gallon rise from the same time last year.

On the Gulf Coast, diesel fell 14.5cts on the week to $4.900 gallon. Compared with the prior year, prices in PADD 3 were up $1.803 gallon.

Rocky Mountain diesel saw a 16.2cts decrease on the week to $5.331 gallon. The PADD 4 region posted a $1.878 gallon increase compared with the same time last year.

West Coast diesel prices fell 10.2cts on the week to average $6.398 gallon. Compared with the previous year, the PADD 5 region was up $2.177 gallon.

West Coast less California diesel slipped 7.7cts on a weekly basis to $5.832 gallon. This represented a $2.087 gallon increase from the same time last year.

California diesel itself fell 13.1cts on the week to $7.051 gallon. Prices in the state remain the highest in the nation, sitting at $2.283 gallon above levels seen at the same time last year.

EIA: U.S. Retail Gasoline Average Falls 17cts on Week

The national average for retail regular gasoline moved lower during the week ended June 1, with declines reported across all major regions, data from the U.S. Energy Information Administration showed Tuesday (6/2).

The U.S. average for regular gasoline fell by 17cts to $4.305 gallon last week, standing $1.178 higher compared with the same week last year, the EIA’s weekly update on fuel pricing showed.

East Coast (PADD 1) gasoline fell by 16.9cts to $4.135 gallon in the week ended June 1, while standing $1.159 higher than the same period last year.

Within the East Coast, New England (PADD 1A) gasoline prices declined by 9.3cts to $4.362 gallon week-over-week, standing $1.390 above the same week of 2025.

Central Atlantic (PADD 1B) gasoline prices decreased by 11.8cts on a weekly basis to reach $4.368 gallon last week, $1.279 higher than the same time last year.

Lower Atlantic (PADD 1C) gasoline prices dropped by 21.9cts to $3.932 gallon in the profiled week, $1.027 above levels seen during the same week last year.

Midwest (PADD 2) prices declined by 21.7cts to $4.135 gallon last week, $1.168 higher compared with the same period last year.

Prices for the same product at the Gulf Coast (PADD 3) fell by 18.5cts to $3.804 gallon, $1.102 higher than the prior year.

Rocky Mountain (PADD 4) gasoline dropped by 22.8cts to $4.329 gallon, standing $1.189 above levels from the same time last year.

West Coast (PADD 5) gasoline prices declined by 6.9cts to $5.500 gallon, $1.293 higher than the corresponding week last year.

Gasoline prices at West Coast less California fell by 8.2cts to $5.080 gallon, while remaining $1.247 above levels seen during the same period last year.