Buckeye, Wolverine ULSD at Merc Parity Amid Balanced Flows

SECAUCUS, NJ (DTN) – 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).