Chicago ULSD Flat to Futures Benchmark on Stockpile Drop

SECAUCUS, NJ (DTN) – Chicago ultra-low sulfur diesel was assessed flat to front-month ULSD on NYMEX on Thursday (5/14) as traders adjusted to federal data showing a decline in Midwest distillate inventories.

Chicago ULSD’s basis to June NYMEX ULSD was called at Merc levels following a 1cent discount to the same benchmark in the previous trading session. .

ULSD basis on the Buckeye Storage Complex, located in northern Indiana, and the Wolverine pipeline – which stretches from the Chicago area to Michigan – was at a premium of 25cts gallon.  The ULSD basis for Buckeye climbed 16cts from the prior session, while for Wolverine, it was unchanged.

ULSD in Midwest’s Group 3 was at a premium of 10cts after a discount of 1cts on Wednesday.

Midwest distillate stocks dropped by 700,000 bbl during the week ended May 8 to 24.2 million bbl, while remaining above the 23.8 million bbl reported a year ago, the U.S. Energy Information Administration (EIA) said in inventory data released Wednesday.

In jet fuel, the basis in Chicago was at a negative 12cts gallon to NYMEX ULSD, improving from the prior session’s discount of 20cts.

Jet fuel in Group 3 weakened to a discount of 27cts gallon from Wednesday’s 25cts.

Jet fuel inventories in the Midwest dipped by 200,000 bbl to 7 million bbl last week but remained above the 7.1 million bbl witnessed in the same week last year, the EIA said.