MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 17th

Updated at 5:00 PM ET 

HEADLINES:

— AAR: Petroleum Carloads Reports 2.6% Drop Last Week

— Analysis: California’s Shift to E15 Unlikely to Change Price Volatility

— EIA: PADD 2 Gasoline Stocks Rise for Second Straight Wk

— EIA: PADD 5 Gasoline Stocks Reach 6-Week High

— EIA: PADD 1 Gasoline Up 2.3M Bbl on Week

— EIA: PADD 3 Gasoline Stocks Expand to 4-Month High

— EIA: U.S. Ethanol Output Rises, Stocks Down 3.1% on Year

— U.S. Enforces Blockade on All Sanctioned Oil Tankers Into Venezuela

NEWS:

AAR: Petroleum Carloads Reports 2.6% Drop Last Week

The Association of American Railroads (AAR) data show petroleum and petroleum product carloads totaled 10,826 in the week ending December 13, down by 2.6% from the same week a year earlier.

Year to date, petroleum and petroleum products carloads totaled 518,478, down 1.6% from the corresponding period of the prior year, an AAR report published on Wednesday (12/17) showed.

Total U.S. weekly rail traffic at 518,904 carloads and intermodal units in the week profiled was down 1.4% when compared with the same week last year.

Total carloads for the week-ended December 13 reached 224,620, down 1.7% compared to the same week last year, while U.S. weekly intermodal volume was 294,284 containers and trailers, a 1.2% decrease from the previous year.

For the first 50 weeks of 2025, U.S. railroads reported cumulative volume of 11,113,752 carloads, up 1.8% on the year. Intermodal units totaled 13,571,515, up 1.7% from the prior year.

Total combined U.S. traffic for the first 50 weeks of the year was 24,685,267 carloads and intermodal units, also reflecting a 1.7% increase compared to last year.

Analysis: California’s Shift to E15 Unlikely to Change Price Volatility

California’s move toward E15 gasoline is unfolding as the U.S. West Coast fuel market remains structurally tight, shaped by refinery closures, limited import flexibility and frequent unplanned outages. While E15 could modestly lower average gasoline prices over time,  U.S. West Coast market participants say it is unlikely to fundamentally change the volatility that defines the region.

The West Coast operates largely as an isolated fuel system, dependent on a shrinking pool of refineries producing California Air Resources Board compliant gasoline. Unlike the U.S. Gulf Coast, the region has limited ability to pull in replacement barrels during disruptions, leaving prices highly sensitive to refinery issues, flaring events and pipeline constraints. That backdrop has raised questions about whether higher ethanol blends could meaningfully ease supply pressure.

E15 is a gasoline blend containing 15% ethanol and 85% gasoline. Approved by the Environmental Protection Agency for vehicles model year 2001 and newer, it contains a higher ethanol concentration than the standard E10 blend.

The Energy Information Administration has found that E15 often is sold several cents cheaper than E10 in markets where it is widely available, as ethanol typically trades below gasoline blendstock on an energy-adjusted basis. In California, where small supply shifts can quickly translate into price swings, that discount has drawn attention from both regulators and traders.

California historically capped ethanol blending at 10% under its CaRFG rules, but Assembly Bill 30 cleared the path for E15 adoption, with regulators now finalizing production and certification requirements. Refiners may blend ethanol into finished CaRFG3 gasoline or directly into CARBOB, potentially stretching each barrel of gasoline blendstock further in an already constrained market.

 “The tight supply of fuel in California means the entry of E15 could matter more here than in other markets; not only will E15 be cheaper because of the low cost of ethanol, it could also relieve local supply constraints in the state and region, putting downward pressure on the price of our existing E10 blends,” Mark Jacobsen, professor of Energy at the University of California San Diego said.

The price relationship between ethanol and gasoline in California means miles per dollar are still likely to favor E15 over E10. The higher ethanol content also raises octane by roughly one point, which can help prevent engine knocking under high-load conditions and marginally improve efficiency in certain driving situations, said Paul Ronney,  professor of Energy at the University of Southern California. “E15 may slightly reduce carbon monoxide and hydrocarbon emissions, though California would likely rely on imported ethanol to meet demand, as in-state production remains limited,” according to Ronney.

Still, traders caution that E15 does not solve the region’s deeper structural issues. “Other regions have more flexibility when prices spike because they can lean on different blends,” a US West Coast trader said.  “Here, E15 isn’t a pressure valve, so when supply tightens, prices move faster and stay higher,” the same trader said.

Supply constrains

Those limitations are rooted in the West Coast’s shrinking refinery base. California has lost roughly 20% of its refining capacity since 2020 as facilities such as Marathon’s Martinez refinery and Phillips 66’s Rodeo plant exited petroleum fuel production, while parts of Phillips 66’s Los Angeles system continue to be retired. The loss of capacity has left the market increasingly exposed to unplanned events.

That vulnerability was underscored this fall when Chevron’s 269,000 bpd El Segundo refinery, a key supplier to Southern California, experienced a major explosion and subsequent flaring events. With few backup supply options and strict CARB import requirements, traders often price in risk immediately, even when output impacts are uncertain.

Essentially, E15 offers limited but tangible relief. Higher ethanol blending can modestly expand effective supply and lower average rack and retail prices if ethanol maintains its typical discount. However, adoption is expected to be gradual, as many California retail stations remain certified only for E10 and infrastructure changes take time.

So far this year, Los Angeles CARBOB regular average price has ranged from $1.70 to $1.80 gallon, down from an average of $1.95 to $2.00 gallon during the same period last year. This reflects a year-over-year decline of approximately 10-15% at the wholesale level , according to DTN data.

California’s shift to E15 marks another step in the state’s transition toward lower carbon fuels, but it does not resolve the underlying tightness baked into the West Coast gasoline market. As refining capacity continues to shrink and reliance on imports grows, E15 may soften baseline prices, while volatility tied to outages, flaring and logistics is likely to persist.

EIA: PADD 2 Gasoline Stocks Rise for Second Straight Wk

Midwest (PADD 2) inventories for gasoline and jet fuel increased in the week ending December 12, while distillate fuel stocks declined and crude oil inventories moved slightly higher, U.S. Energy Information Administration data released Wednesday (12/17) showed.

PADD 2 gasoline stocks rose by 1.1 million bbl to 48.8 million bbl in the profiled week, compared with 47.4 million bbl in the same week last year. The build follows a 2.8 million bbl increase the prior week, marking the second consecutive weekly rise in Midwest gasoline inventories. Motor gasoline blending component stocks also increased, climbing to 44.6 million bbl, above the 43.7 million bbl held a year earlier. The back-to-back builds have improved near-term supply coverage across the Midwest, pushing gasoline inventories modestly above annual basis after a period of tighter balances. That more comfortable supply backdrop has weighed on prices, with PADD 2 retail gasoline averaging $2.59 gallon last week, 19.4cts below the same period last year.

Regional distillate fuel oil inventories declined by 800,000 bbl to 26.1 million bbl, slipping below the 27.2 million bbl reported in the same week last year. The region held 25.2 million bbl of ultra-low sulfur diesel, compared with 26.4 million bbl a year earlier. The draw reverses part of the previous week’s build and leaves Midwest distillate inventories below year-ago levels, underscoring a tightening stock position as winter demand remains elevated across northern markets. That tighter inventory structure has kept diesel prices firm, with PADD 2 retail diesel averaging $3.566 gallon in the week ended Dec. 15, 11.7cts higher than the same week last year.

Jet fuel inventories in PADD 2 increased by 500,000 bbl to 7.9 million bbl, compared with 7.2 million bbl in the same week last year. The build lifts Midwest jet fuel stocks further above year-ago levels, improving inventory coverage following earlier seasonal draws.

Crude oil inventories in PADD 2 edged slightly higher, rising by 100,000 bbl to 102.1 million bbl, and remained below the 105.1 million bbl reported in the same week last year.

EIA: PADD 5 Gasoline Stocks Reach 6-Week High

U.S. West Coast (PADD 5) gasoline inventories rose for a second consecutive week in the week ended December 12, while distillate and jet fuel stocks were unchanged and crude oil inventories slipped, according to Energy Information Administration data released Wednesday (12/17).

Motor gasoline stocks in the West Coast region reached 30 million bbl for the latest reporting week, or 1.6 million bbl higher than the volume seen the previous week. It marked a six-week high for West Coast gasoline inventories since the 30.2 million bbl reading cited by the EIA for the week ended September 26. Gasoline stockpiles were also up 1.5 million bbl from the same week a year ago.Gasoline imports rose by 107,000 bpd to 208,000 bpd last week and were 161,000 bpd higher than in the same week the previous year.

PADD 5 distillate fuel oil inventories were unchanged at 11.5 million bbl week-over-week. A year ago, stocks were 900,000 bbl lower, EIA data showed. Distillate imports fell by 6,000 bpd to 1,000 bpd last week and were 8,000 bpd lower from the same week of last year.

Jet fuel inventories also held steady on the week, at 11.4 million bbl, while dropping 200,000 bbl from a year ago. Jet fuel imports rose by 95,000 bpd to 147,000 bpd last week and were 91,000 bpd higher than in the same week of last year.

Crude oil inventories slipped by 200,000 bbl to 47.6 million bbl in the latest reporting week. That was 3.1 million bbl lower than the volume recorded year-over-year, EIA data showed.Due to weaker demand and ample regional supply, West Coast gasoline retail prices slid by 10.5cts to $3.851 gallon in the week ending December 15, though prices stood 6.6cts higher than the corresponding week last year, the EIA’s weekly update on fuel pricing showed. In comparison, the U.S. average for regular gasoline fell by 4.5cts to $2.895 gallon last week, standing 12.1cts lower than the same week last year, according to EIA pricing data.

EIA: PADD 1 Gasoline Up 2.3M Bbl on Week

East Coast inventories of gasoline and distillate fuel oil increased in the week ending December 12, while regional jet fuel stocks and crude oil inventories declined, U.S. Energy Information Administration data released Wednesday (12/17) showed.

PADD 1 gasoline stocks rose by 2.3 million bbl to 51.9 million bbl in the profiled week but remained below the 55.7 million bbl reported in the same week last year. Motor gasoline blending component inventories also increased, rising by 2 million bbl to 49.2 million bbl, compared with 52.9 million bbl a year earlier.

The combination of higher finished gasoline and blending component stocks indicates improved supply availability on the East Coast, though total gasoline inventories remain below levels from a year earlier. That suggests that balances are still tighter than last winter despite the weekly build.

Jet fuel inventories on the East Coast declined by 700,000 bbl to 9.1 million bbl, remaining below the 9.9 million bbl held in the same week last year. The draw leaves PADD 1 jet fuel stocks near the lower end of their recent range, with inventories continuing to lag levels from a year earlier despite relatively stable supply conditions. That persistent year-over-year deficit highlights the limited cushion in East Coast jet fuel inventories compared with other refined products.

Regional distillate fuel oil inventories increased by 1.7 million bbl to 30.4 million bbl, but remained well below the 35.8 million bbl reported in the same week last year. The region held 29.2 million bbl of ultra-low sulfur diesel, compared with 34.4 million bbl a year earlier. Even with the larger weekly build, East Coast distillate inventories remain historically tight, underscoring limited buffer heading deeper into the winter demand period.

Crude oil inventories in PADD 1 stood at 7.8 million bbl, down 100,000 bbl on the week, and compared with 7.5 million bbl in the same week last year.

EIA: PADD 3 Gasoline Stocks Expand to 4-Month High

U.S. Gulf Coast (PADD 3) gasoline inventories recorded a fourth-month high, along with an increase in distillate fuel oil and jet fuel stocks during the week ended December 12, according to Energy Information Administration data released Wednesday (12/17).

Motor gasoline inventories in the Gulf Coast region were 87 million bbl in the profiled week, which is 300,000 bbl higher than the volume reported in the prior week and the highest since July 25 when it was at 87.03 million, EIA data showed. This was also a 5.7 million bbl increase from the same week last year. Gasoline imports in the region amounted to 10,000 bpd in the reference week compared to zero imports last week, but they were 4,000 bpd higher in the same week of the prior year.

PADD 3, the main U.S. refining hub, also saw a build in distillate fuel oil stocks by rising 700,000 bbl to 46.4 million bbl week-over-week. Distillate inventories were also 7.9 million bbl higher than the same volume reported annually, the EIA reported. 

Jet fuel inventories on the Gulf Coast also jumped by 1.3 million bbl to 14.3 million bbl in the week ended December 12 and were up 2.6 million year-over-year.

As a net exporter of distillates and jet fuel, USGC PADD 3 did not report imports of those products.

Abundant supplies and sluggish seasonal demand continued adding pressure on PADD 3 gasoline prices which were little changed last week, edging down just 0.1cts to average $2.492 gallon in the week ended December 15, according to EIA. This left PADD 3 prices about 40.3cts below the nationwide average, which fell by 4.5cts to $2.895 gallon.

In the same period, diesel retail average prices dropped by 6cts to average $3.267 gallon las week; this was about 34cts lower than the nationwide average of $3.607 gallon.

EIA: U.S. Ethanol Output Rises, Stocks Down 3.1% on Year

The Energy Information Administration reported on Wednesday (12/17) that overall ethanol production in the United States averaged 1.131 million bpd, up 26,000 bpd week-on-week and 24,000 bpd, or 2.2% higher than in the same week last year. Four-week average output at 1.119 million bpd was 26,000 bpd above the same four weeks last year.

Midwest ethanol production averaged 1.078 million bpd, up 32,000 bpd week-on-week and 33,000 bpd, or 3.2% higher than in the same week last year. Four-week average output at 1.062 million bpd was 31,000 bpd above the same four weeks last year.

Ethanol blending activity in the U.S. averaged 906,000 bpd, up 55,000 bpd week-on-week and 14,000 bpd, or 1.5% lower than in the same week last year. Four-week average blending demand at 875,000 bpd was 12,000 bpd below the same four weeks last year.

Blender inputs at the East Coast were up 12,000 bpd on the week while inputs in the Midwest were up 15,000 bpd, up 19,000 bpd on the Gulf Coast and up 7,000 bpd on the West Coast.

Domestic ethanol inventories ended the week at 22.353 million bbl, down 157,000 bbl week-on-week and 721,000 bbl, or 3.1% lower than in the same week last year.

East Coast PADD 1 inventories ended the week at 6.458 million bbl, up 69,000 bbl week-on-week and 313,000 bbl, or 4.6% lower than in the same week last year.

Midwest PADD 2 inventories ended the week at 9.097 million bbl, down 152,000 bbl week-on-week and 2,000 bbl, or 0% lower than in the same week last year.

Gulf Coast PADD 3 inventories ended the week at 3.964 million bbl, down 52,000 bbl week-on-week and 336,000 bbl, or 7.8% lower than in the same week last year.

West Coast PADD 5 inventories ended the week at 2.456 million bbl, down 18,000 bbl week-on-week and 68,000 bbl, or 2.7% lower than in the same week last year.

U.S. Enforces Blockade on All Sanctioned Oil Tankers Into Venezuela

U.S.  President Donald Trump has ordered a blockade of all sanctioned oil tankers into Venezuela, as his administration extended its  pressure campaign against the OPEC-member,  which exported nearly 1 million bpd last month.

“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” Trump wrote on his social media platform late Tuesday (12/17). “It will only get bigger, and the shock to them will be like nothing they have ever seen before — Until such time as they return to the United States of America all of the Oil, Land, and other Assets that they previously stole from us,” Trump said.

The order means that If a blacklisted tanker tries to enter or leave Venezuela, the U.S. Navy or Coast Guard may board it, seize the oil, or force it to turn around.

Crude and gasoline futures, which hit multi-year lows in Tuesday’s trading, rebounded Wednesday (12/17) on news of the blockade. NYMEX WTI for January delivery was up $1.04, or 2%, at $56.31 bbl after briefly falling beneath the key $55 bbl support on Tuesday. NYMEX front-month gasoline rose $0.0161 to $1.6970 after a drop beneath $1.60 in the prior session.

Venezuela averaged between 921,000 and 967,000 bpd of exports in November, with most of those shipments destined for China, according to cargo surveyors.

The Trump administration has mounted a massive pressure campaign against the regime of Venezuelan President Nicolas Maduro, in support of the Latin American country’s democratic opposition leader María Corina Machado.

The naval blockade comes after the seizure of a loaded Venezuelan oil tanker by U.S. forces last week.