Houston Jet Fuel Basis Surges on Active Trading

HOUSTON, TX (DTN) – Basis for jet fuel at the Houston origin of the Colonial Pipeline in the Gulf Coast spot market surged Tuesday (2/17) on firm trading activity. defying abundant supplies and weak demand fundamentals.

Jet fuel basis rose by 5.5cts to a 16cts discount against March ULSD futures contract on the New York Mercantile Exchange.

Bids for jet fuel in the USGC market were heard talked on the day at minus 17.25cts against the front-month NYMEX ULSD futures contract while offers were at minus 16cts versus the same benchmark. Those levels were above the 21.50cts discount traded on Friday (2/13) for cycle 11 pipeline movement on the Colonial.

Jet fuel basis strength in the U.S. Gulf Coast was attributed to the expectation of tight supplies driven by the Spring refinery maintenance season, which typically occurs between February and March ahead of peak summer driving demand.