Chicago Jet Basis Jumps 45cts, Highest Since October

DAVENPORT, FL (DTN) – Chicago jet fuel basis extended its rally on Monday (3/30), climbing by 43cts to a 45cts premium to May NYMEX ULSD futures, the highest in five-months, as tightening distillate fundamentals and persistent Gulf Coast strength continued to pull Midwest values higher.

Jet fuel basis in Chicago was traded at a 2cts premium to front-month ULSD futures for April delivery on Friday (3/30), reversing the average discount basis seen since October 31, when it reached a 75cents premium over the same benchmark. 

“Once Chicago flipped to a premium, it opened the door for a much sharper repricing,” a source familiar with Midwest refined product trading said. “Now it’s more about how high it needs to go to stay competitive with Gulf Coast barrels tied to export demand.”

Front-month ULSD futures were at $4.2525 gallon, up 1.61cts on the session, while the prompt ULSD structure remained backwardated, with the front-month contract holding a 13.51cts premium to the second month, reinforcing tight near-term supply conditions.

The sustained backwardation in ULSD futures, alongside distillate crack spreads holding above $90 bbl, continues to signal strong prompt demand and limited availability, supporting further strength in jet fuel pricing.

Chicago’s stronger basis reflects ongoing competition with Gulf Coast markets, where spot prices are increasingly tied to export economics, prompting  inland buyers raise bids  to secure supply and prevent further tightening.