LA ULSD Basis Climbs 6cts on Refinery Constraints

MIAMI, FL (DTN) – Prompt Los Angeles ultra low sulfur diesel (ULSD) basis strengthened Friday (5/29), climbing by 6cts as refinery capacity losses continued to support the West Coast distillate market.

Los Angeles ULSD traded three times during the session, first at a 42cts premium, then at a 43cts premium, and finally at a 44cts premium to July NYMEX ULSD futures. The final trade placed the basis 6cts above Thursday’s (5/28) last done trade.

Distillate fuel oil inventories in the West Coast region were steady at 10 million bbl during the week ended May 22 and stood 200,000 bbl higher than the same week last year, according to U.S. Energy Information Administration data.

PADD 5 distillate imports climbed by 22,000 bpd to 40,000 bpd during the profiled week and were 27,000 bpd higher than the same week in 2025, indicating additional barrels continued arriving into the region.

The shutdown of Phillips 66’s 139,000 bpd Los Angeles refinery and the ongoing closure process at Valero’s 145,000 bpd Benicia refinery have removed significant production capacity from the region, tightening the supply outlook and supporting diesel premiums.