LA CARBOB Basis Falls by Over 20cts on Tight Supply

MIAMI, FL (DTN) – Basis values for California reformulated gasoline blendstock under California Air Resources Board fuel standards weakened sharply Monday (5/11) across both Los Angeles and San Francisco markets following recent elevated pricing tied to tight West Coast supply conditions.
Prompt Los Angeles CARBOB regular basis fell by 21cts to a 32cts premium against June NYMEX RBOB futures after trading at that level. Los Angeles CARBOB premium basis also moved lower on the day to a 52ct premium also down by 21cts with CARBOB regular.
In San Francisco, prompt CARBOB regular basis declined by 15cts to a 41cts premium against June NYMEX RBOB futures. The premium to San Francisco CARBOB moved in tandem, falling by 15cts to a 69cts premium.
Motor gasoline inventories in the PADD 5 region fell for the third consecutive week, declining by 200,000 bbl to 28.2 million bbl during the week ended May 1, after falling the prior week, the EIA’s Weekly Petroleum Status Report showed. Year-over-year, gasoline stocks in the region were higher by 1.5 million bbl.
Traders continue to monitor tightening West Coast refining capacity following the shutdown of Phillips 66 Los Angeles refinery earlier this year and the phased idling of Valero Benicia refinery, which have reduced gasoline production flexibility across the region.