LA ULSD Discount to RBOB Steady, SF Weakens

MIAMI, FL (DTN) — Los Angeles ULSD differentials held steady at a 5ct discount to February NYMEX RBOB futures on Friday (1/16), while San Francisco ULSD basis weakened further, falling to a 16.5cts discount amid sustained selling pressure in the spot market.

Market participants said LA ULSD values remained unchanged on the session, reflecting balanced supply demand conditions and limited spot activity in Southern California.

In San Francisco, however, ULSD basis continued to trend lower following a gradual erosion that began earlier in the month. The decline started January 9, when SF ULSD basis slipped to a 10cts discount from a prior 8cts, according to market sources.

The move lower accelerated by January 12, when San Francisco ULSD was assessed at a 16.5cts discount to February NYMEX RBOB futures, marking the weakest level seen so far this month.

Market participants did not cite a specific reason behind the decline.