Colonial Pipeline Notional Values

MARKETWIRE ALERTS 

MarketWire Afternoon News for May 26^st

Updated at 6:00 PM ET 

HEADLINES:

— LA Jet Fuel Basis Edges Higher on Supply Tightness

— LA, SF CARBOB Basis Rise on Tight Supply

— Midwest CBOB Basis Strengthens on Tighter Spot Market

— Chicago Jet Fuel Basis Weakens as Midwest Refiners Restart

— Brent Rises on Fresh Gulf Clashes, Diverging With WTI

–PNW Sub Oct Reg Basis Jumps on Tight Supply, Flaring

— EIA: Texas to Lead 45 Bcf/d in U.S. Gas Pipeline Growth

— Flint Hills’ Corpus Christi Refinery Reports Flare Event

— ExxonMobil’s Beaumont Refinery Reports Flare at Hydrocracker Unit

— Brent-WTI Near 2-Week High on Renewed Iran Tensions

— CB: U.S. Consumer Confidence Edges Down in May

NEWS:

LA Jet Fuel Basis Edges Higher on Supply Tightness

Prompt Los Angeles jet fuel basis strengthened Tuesday (5/26), with trades confirmed higher in the spot market even as West Coast jet fuel inventories and imports increased during the latest reporting week.

Los Angeles jet fuel traded twice during the session, first at a 10.5cts premium and later at a 13cts premium to June NYMEX ULSD futures. The final trade placed the basis 5cts above Monday’s (5/25) last pegged level.

The market move followed weeks of elevated volatility in Los Angeles jet fuel. Earlier this month, the basis climbed by 15cts on May 5 to a 60cts premium after rebounding from a sharp correction that followed the historic $1.10 gallon premium reached in late April , the highest level ever recorded for the market.

According to U.S. Energy Information Administration data for the week ended May 15, jet fuel inventories in the West Coast region increased by 400,000 bbl to 11 million bbl and stood 200,000 bbl above the same week last year.

Jet fuel imports into the region surged by 64,000 bpd to 89,000 bpd during the profiled week and were 65,000 bpd higher year over year, suggesting additional barrels continued arriving into the West Coast market amid ongoing supply concerns.

Despite the inventory and import increases, traders continued to cite constrained refining capacity as a key factor underpinning jet fuel values. The shutdown of Phillips 66’s 139,000 bpd Los Angeles refinery and the ongoing idling process at Valero’s 145,000 bpd Benicia refinery have reduced regional fuel production flexibility heading into peak summer travel demand.

LA, SF CARBOB Basis Rise on Tight Supply

Los Angeles and San Francisco CARBOB regular basis strengthened Tuesday (5/26), with spot market trades moving higher as West Coast gasoline supply concerns continued ahead of the summer driving season.

Los Angeles CARBOB regular basis traded at a 48cts premium to June NYMEX RBOB futures, up 5cts from the prior confirmed level. Los Angeles CARBOB premium followed in tandem, climbing by 5cts to a 58cts premium, maintaining the 10cts spread between regular and premium grades.

San Francisco CARBOB regular basis also strengthened, trading at a 75cts premium to June RBOB futures, up 9cts from its previous pegged level of 66cts.

The stronger basis values came as the U.S. Energy Information Administration reported another draw in West Coast gasoline inventories during the week ended May 15. Motor gasoline inventories in the PADD 5 region declined by 400,000 bbl to 27.9 million bbl after posting an increase the previous week.

Although gasoline inventories were still 800,000 bbl above the same period last year, the latest weekly decline added to concerns surrounding tightening West Coast supply fundamentals. Reduced California refining capacity, including refinery shutdowns and lower import flows into the region, have continued to keep the market structurally tight heading into peak summer gasoline demand.

Midwest CBOB Basis Strengthens on Tighter Spot Market

The basis for CBOB in the Midwest strengthened Tuesday (5/26) against benchmark NYMEX futures as a drop in spot inventories and tight prompt pipeline space forced short-covering buyers to pay higher regional premiums.

The basis for Chicago CBOB was at a discount of 6cts gallon to NYMEX gasoline for June. That discount was at 15cts gallon on Friday, prior to Monday’s Memorial Day holiday.

On the Buckeye Storage Complex and the Wolverine Pipeline, the CBOB basis was also at a minus 6cts to NYMEX gasoline to June. On Friday, Buckeye CBOB was at a discount of 9cts while Wolverine CBOB at 12cts.

Spot inventories of gasoline tightened heading into the Memorial Day weekend as local terminals and blenders cleared out existing stocks of the product in anticipation of higher demand at the pumps and to make room for fresh production cycles. With that prompt-delivery barrels of CBOB commanded higher pricing from buyers looking to restock after the holidays.

Chicago Jet Fuel Basis Weakens as Midwest Refiners Restart

The basis for jet fuel in the Chicago market softened Tuesday (5/26) against benchmark NYMEX futures as Midwest refiners completed scheduled springtime maintenance and restored baseline output.

Chicago jet fuel’s differential to NYMEX ULSD for June delivery stood at minus 40cts gallon. That was 25cts more than its 15cts discount at last week’s close, prior to Monday’s Memorial Day holiday.

On Group 3, the discount for jet fuel was 60cts gallon versus Friday’s 55cts.

The return to normal processing capacities across major Illinois refining nodes triggered an immediate supply flush into local pipeline networks.

The influx of fresh local supply effectively neutralized a steep product deficit that had gripped the midcontinent transport sector for nearly two months. The product expansion unwound a severe regional bottleneck that had pushed spot prices above $5 gallon throughout late March and April when maintenance coincided with Middle East supply panics.

Brent Rises on Fresh Gulf Clashes, Diverging With WTI

Global crude benchmarks diverged sharply Tuesday (5/26) as fresh escalation in the Middle East conflict reignited global supply worries that boosted Brent futures while deteriorating domestic consumer data placed a lid on U.S. oil futures.

ICE Brent crude for July delivery settled up $3.44, or 3.6%, at $99.58

bbl. NYMEX WTI for July delivery fell $2.71, or x%, to close at $93.89 bbl.

Among refined products, NYMEX ULSD futures for June delivery retreated $0.1732 to $3.7146 gallon, and front-month NYMEX RBOB futures fell $0.2393 to $ 3.2205 gallon.

The US dollar index softened by 0.056 points to 99.13 against a basket of foreign currencies by 2:30 p.m. ET.

The Brent-WTI spread stood at $5.69 bbl at settlement, after being more than $6 apart earlier in the session. Prior this, the gap was at its widest on May 14, a day after the International Energy Agency (IEA) cautioned in its May monthly report that the ongoing closure of the Strait of Hormuz had knocked a staggering 14.4 million bpd of regional output below pre-war baselines.

Tuesday’s widening of the spread came after U.S. military strikes against Iranian mine-laying vessels and radar installations on Monday (5/25) that effectively dashed hopes for an imminent diplomatic breakthrough in Qatar, prompting immediate risk-premium buying.

The renewed military friction trained a spotlight on depleted global stockpiles following months of persistent maritime chokepoint restrictions. The drawdowns have left international crude inventories at structurally vulnerable levels ahead of the peak summer driving season.

Major investment banks, including JP Morgan, issued fresh warnings Tuesday indicating that the cumulative loss of over 1 billion bbl of shut-in Gulf production since February has created an structural deficit that cannot be easily offset by Atlantic Basin exports.

With emergency strategic reserves scheduled to taper off by July, physical traders are rapidly pricing in a severe structural shortfall. This underlying inventory anxiety ensures that while U.S. recession fears drag on WTI, Brent remains heavily anchored by the absolute reality of missing physical wet barrels.

WTI’s weakness was partly due to a slide in U.S. consumer confidence, as The Conference Board’s flagship index fell  0.7 points to 93.1 in May, underscoring the impact of persistent price shocks and soaring domestic fuel costs on household sentiment.

PNW Sub Oct Reg Basis Jumps on Tight Supply, Flaring

Pacific Northwest Sub Octane distillate basis values surged Tuesday (5/26) as ongoing refinery disruptions, flaring activity and tightening regional supply conditions lifted bids sharply higher across the market.

PNW Sub Octane Regular basis climbed by 20cts on the day after bids were heard at 24cts, 30cts and last at a 36cts premium to July NYMEX ULSD futures, lifting the current market value to a 36cts premium from Monday’s last pegged level of 16.5cts, according to DTN data.

PNW Sub Octane Premium basis also strengthened sharply after a bid was heard at a 60cts premium to July NYMEX ULSD futures, moving the current basis value to 60.5cts. The move represented a 17.5cts increase from Monday’s previously pegged level.

The rally came as supply concerns continued to tighten distillate markets across the U.S. West Coast. Market participants have been monitoring recurring refinery operational issues and flaring activity in California, including recent events at PBF Energy’s Torrance refinery and Marathon’s Los Angeles refinery, which have contributed to tighter product availability.

Structural refining capacity losses also continued supporting the market. Valero has been idling its 145,000 bpd Benicia refinery this year, while Phillips 66 is preparing to shut its 139,000 bpd Wilmington refinery. The closures have reduced regional fuel production capacity and increased dependence on imported barrels across the West Coast and Pacific Northwest.

EIA: Texas to Lead 45 Bcf/d in U.S. Gas Pipeline Growth

U.S. natural gas pipeline capacity is expected to increase by almost 45 billion cubic feet per day (Bcf/d) through 2027, with the bulk of the expansion originating in Texas, the U.S. Energy Information Administration said Tuesday (5/26).

Approximately 70%, or 31.6 Bcf/d, of the new capacity is already under construction and more than 66%, or 29.7 Bcf/d, of the additions will begin in Texas, according to the EIA’s Natural Gas Pipeline Projects Tracker.

The projects in Texas will provide additional takeaway capacity out of the Permian Basin and debottleneck the Waha Hub. These will supply natural gas to LNG export terminals, as well as residential, power, and industrial users.

Key additions include the 138-mile Rio Bravo Pipeline Project originating in Texas with a capacity of up to 4.5 Bcf/d. That will deliver feedgas to NextDecade’s Rio Grande LNG export terminal, targeting an in-service date in the second half of this year.

The 365-mile, 2.5 Bcf/d Blackcomb pipeline is currently under construction and slated to enter service in the third quarter 2026. The pipeline will deliver Permian supply from the Waha hub to the Agua Dulce hub, further clearing the Waha bottleneck.

The Hugh Brinson Project will add a total 2.2 Bcf/d of takeaway capacity from the Permian Basin. The developer expects phase 1 to begin flowing in the fourth quarter of 2026, and phase 2 in the first quarter of 2027.

In Louisiana, the Port Arthur Pipeline Louisiana Connector is expected to begin service in the second half of 2026 with 2.0 Bcf/d of capacity. By the end of 2027, the Pelican Pipeline is expected to come online, bringing additional capacity there to 8.4 Bcf/d.

Flint Hills’ Corpus Christi Refinery Reports Flare Event

Flint Hills Resources reported Saturday (5/23) a 24-hour flaring event at the West Plant of its 269,500 bpd Corpus Christi West Refinery in Corpus Christi, a filing with the Texas Commission on Environmental Quality said.

The event began at 9:30 p.m. CT Friday (5/22) and ended at 9:30 p.m. CT Saturday (5/23), the filing said.

According to the details of the event, intermittent flaring occurred from the refinery’s first- and second-stage flare systems following a power interruption.

Estimated emissions included approximately 11,229 pounds of sulfur dioxide, 2,543 pounds of carbon monoxide, 2,047 pounds of propylene, 1,310 pounds of propane, 713 pounds of n-pentane, 526 pounds of benzene and smaller quantities of other hydrocarbon compounds.

The company said personnel initiated measures to assess and minimize emissions following the incident and noted the event remained ongoing at the time the report was submitted. Flint Hills also said handheld fenceline monitoring detected no sulfur dioxide, carbon monoxide or benzene readings above reported thresholds.

The refinery primarily produces jet fuel, diesel and gasoline.

DTN reached out to Flint Hills Resources for additional details but did not get an immediate response.

ExxonMobil’s Beaumont Refinery Reports Flare at Hydrocracker Unit

ExxonMobil reported Saturday (5/23) a five-hour plus flaring at the hydrocracker unit of its 630,000 bpd Beaumont Refinery in Beaumont, a filing with the Texas Commission on Environmental Quality said.

The event began at 4:19 p.m. CT Thursday (5/22) and ended at 9:34 p.m. CT, the filing said.

According to the details of the event, a process unit upset triggered flaring at the refinery’s FCC, and also its high-pressure and low-pressure flare systems.

Estimated emissions included approximately 10,160 pounds of sulfur dioxide, 796 pounds of pentanes, 744 pounds of carbon monoxide, 555 pounds of butanes, 190 pounds of unspecified VOCs, 116 pounds of propane and 110 pounds of hydrogen sulfide, among other compounds.

The company said process streams were routed to flare systems to minimize emissions and that no offsite impacts were reported. ExxonMobil also said it expects to meet contractual commitments.

The Beaumont refinery is among the largest refining facilities in the United States and primarily produces gasoline, diesel and jet fuel.

DTN reached out to ExxonMobil for additional details but did not get an immediate response.

Brent-WTI Near 2-Week High on Renewed Iran Tensions

The Brent-WTI spread rose above $6 bbl Tuesday (5/26) on renewed concerns over the Middle East conflict as the U.S. launched fresh attacks on Iranian maritime and security assets while Tehran threatened to target regional infrastructure, despite a ceasefire and efforts to end their war.

As of 10:27 a.m. ET Tuesday (5/26), Brent was trading at $100.03 bbl while WTI was at $93.87 bbl, resulting in a premium of $6.16 bbl for the U.K North Sea crude versus the U.S. model. The last time the spread was this wide was on May 14 when it closed the day at $6.93 bbl in Brent’s favor, DTN price data showed, as the market digested an IEA mid-month report that cited a global supply draw of 246 million bbl across March and April.

The current widening comes after U.S. forces launched defensive overnight airstrikes against Iranian missile sites and mine-laying vessels near the Strait of Hormuz, threatening to scuttle a fragile seven-week-old ceasefire just as top Tehran negotiators arrived in Qatar for peace talks. Iran responded by threatening to target regional oil installations and energy infrastructure across the Persian Gulf if U.S. military operations continue to disrupt its security assets.

The price divergence highlights how Brent, as the global crude benchmark, has re-absorbed maritime supply risks associated with the ongoing restrictions for energy shipments on the Strait of Hormuz. Conversely, WTI remains tied to domestic physical infrastructure and broader demand outlooks.
 

CB: U.S. Consumer Confidence Edges Down in May

U.S. consumer confidence edged downward in May as intensified inflationary pressures from the Middle East conflict dragged down assessments of current economic conditions, the Conference Board said Tuesday (5/26).

The Conference Board reported that its headline confidence index dipped 0.7 points to 93.1 this month. The index for April was revised upwardly to 93.8 from a prior 92.8, according to the report.

“Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” Dana M. Peterson, chief economist at the Conference Board, said in a news release. “Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month.”

The confidence index is a gauge of the household optimism that fuels roughly 70% of the U.S. economy through personal spending and is closely watched by market analysts.

Consumers’ assessment of their current economic situation — the present situation index — retreated by 3.2 points to 121.2 in May. The expectations index, which gauges the short-term outlook, rose 1.0 point to 74.4, remaining below the 80-point threshold often associated with upcoming recession.

The Conference Board added that write-in responses highlighted that price shocks and the ongoing conflict remained primary sources of economic stress. Peterson also noted that references to prices, oil, and gas increased in frequency for a second consecutive month, while mentions of war remained elevated.

The U.S. Dollar Index retreated modestly within the 99.00 barrier, following the release of the Conference Board data.