MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 12th

Updated at 5:00 PM ET 

HEADLINES:

— Chicago CBOB-ULSD Spread Narrows Ahead of Winter

— Baker Hughes: North America Rig Count Flat on Week

— IATA: N.A. 2026 Passenger Profit Seen Up by 3% on Lower Fuel

NEWS:

Chicago CBOB-ULSD Spread Narrows Ahead of Winter

Limited diesel supplies and low seasonal demand for gasoline continued narrowing the spread between both products in the Chicago spot market on Friday (12/12).

The Chicago CBOB-ULSD spread narrowed to 36.61cts on Friday, below the 45.88cts mark recorded the same day last week, and it was narrower than 62.87cts reported month-over-month, according to DTN data.

However, the spread between Chicago CBOB and ULSD remains wider than both the year-to-date average of 23.90cts and the the 17.27cts average during the same period of last year, indicating ULSD continues to trade at a relatively deep discount to gasoline. Still, the move highlights a clear shift in relative value as the Midwest market transitions into winter demand.

Chicago ULSD spot prices have outperformed CBOB prices since late November following a disappointing summer driving season for gasoline.

The spread has been supported by firmer diesel fundamentals. Midwest (PADD 2) ultra-low sulfur diesel inventories amounted 1.4 million bbl in the week ended December 5, below the same time last year, tightening supply coverage as colder weather approaches, according to the most recent U.S. Energy Information Administration data. Average U.S. diesel retail prices were at $3.635 gallon last week, 23cts up year-over-year, the same EIA data showed.

A source familiar with Midwest refined-products markets said, “Based on the fundamentals, you could argue ULSD still looks undervalued relative to CBOB, especially with a tighter distillate market as the region moves deeper into winter.”

Baker Hughes: North America Rig Count Flat on Week

North American drilling activity was unchanged this week, with no net addition or loss in rigs across the U.S. and Canada after the prior week’s drop of 17, Baker Hughes’ rigs report released on Friday (12/12) showed.

Total rigs operating in North America stood at 740 in the reference week, the same week- over-week, the report showed.

Rigs operating in the United States alone fell by one in the profiled week to 548. But that was still 41 below the U.S. rig count of 589 that Baker Hughes had for the same time of last year.

Also in the U.S., oil-directed rigs rose by one to 414 week-on-week. Gas rigs fell by two to 127. Miscellaneous rigs were unchanged at seven.

In North America, land-based drilling advanced by one to 528 this week. Offshore activity declined by two to 17. Activity in inland waters were unchanged at three. The Gulf of Mexico rig count slid by two to 10.

Canada’s total rig count rose by one week-on-week to 192, with oil-directed rigs down three to 123. Gas rigs climbed by four to 69. Total rigs for Canada were one above last year’s level of 191.

IATA: N.A. 2026 Passenger Profit Seen Up by 3% on Lower Fuel

North American airlines, dominated by U.S. carriers, are expected to see net profit per passenger climb by 3% in 2026 as lower jet fuel prices provide essential cost relief, according to the International Air Transport Association (IATA).

The forecast, contained in IATA’s December 2025 Global Outlook for Air Transport, is on the premise that passenger yields are expected to remain steady in the coming year despite rising non-fuel costs.

According to IATA, North American net profit per passenger is projected to rise from an estimated $9.50 in 2025 to $9.80 in 2026. It places the region second globally in this metric, trailing only the Middle East, which benefits from its hub carrier model and strong long-haul traffic.

North America’s increase by 3% in profit per passenger is supported by a more favorable fuel environment. IATA projects the global average jet fuel price to decline to $88 bbl in 2026 from $90 bbl estimated for this year, a decrease of 2.4%.

The relief from jet fuel is crucial as non-fuel operating costs—driven by rising labor expenses, aging fleets, and high maintenance, repair, and overhaul costs—are forecast to climb by over 5.8% globally.

Despite the increase in per-passenger earnings, North American carriers are expected to cede the top global profit position to European airlines in 2026. The U.S.-led region is expected to record total net profit of $11.3 billion next year, an increase from the $10.8 billion estimated for 2025, while European airlines are projected to see total net profit of $14 billion versus $13.2 billion this year.

The North American air travel market faces additional constraints that will limit growth. Projected Revenue Passenger Kilometre (RPK) is expected to grow by 1.5%, the lowest among all IATA regions, driven by stagnating domestic U.S. demand.

Capacity is also expected to grow by 1%, the lowest rate globally, limited by persistent operational constraints including pilot shortages and supply chain delays that keep older, less fuel-efficient aircraft flying longer.