MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for February 25th:

Updated at 5:00 PM ET 

HEADLINES:

— Midwest Gasoline Basis Dips on Cycle Shift, Stock Build

— Flint Hills Reports Flaring at Corpus Christi, TX Refinery

— EIA: PADD 2 Gasoline Stocks Remains at 2-Year High

— EIA: PADD 1 Gasoline & Distillates DN, Jet Up

— EIA: PADD 3 Gasoline Stock Flat; Distillate, Jet Fuel Down

— EIA: PADD 5 Gasoline Stocks See Third Weekly Decline  

— EIA: U.S. Crude Stocks Surge 16M Bbl; Products Down

— EIA: U.S. Ethanol Output Jumps 3% Y-o-Y for 2nd Straight Week

— EIA: Propane/Propylene Stocks Rise 25.3% Y-o-Y

— MCM Energy Buys Battalion Oil Delaware Assets for $160M

NEWS:

Midwest Gasoline Basis Dips on Cycle Shift, Stock Build

The basis for Midwest refined products moved lower Wednesday (2/25) as the market transitioned from Cycle 3 to Cycle 1 scheduling, which marked the completion of trading for fuel scheduled for current-month delivery.

Chicago CBOB basis was assessed at a 34cts discount to April RBOB futures, down 10.5cts from the prior session. At Buckeye and Wolverine, CBOB differentials were marked at a 35cts discount to the April RBOB contract, each falling 11.5cts day on day, DTN Energy data showed.

In distillates, Chicago ULSD basis was assessed at an 11.25cts discount to April ULSD futures, improving 13.75cts from Tuesday. Buckeye and Wolverine ULSD were each marked at a 7.25cts discount to the April ULSD contract, strengthening 13.25cts on the session.

Chicago jet fuel was assessed at a 21cts discount to April ULSD futures, narrowing 14cts from the previous session.

The shift in discounts came as the benchmark for NYMEX ULSD and RBOB futures both transitioned from March to April.

Gasoline posted the sharpest day-on-day decline following a fresh inventory build in PADD 2. This occurred as traders adjusted positions for the spring delivery cycle.

Traders said Wednesday’s price moves reflected the shift in pipeline cycle and the rollover to the April futures contract, which reset differentials across the complex as liquidity moved into Cycle 1 trading.

“The discount was more pronounced on gasoline, especially with today’s inventory numbers,” a source familiar with the Midwest market said, noting that the cycle shift amplified the move as positions were adjusted into the new cycle.

Supporting that view, motor gasoline inventories in Midwest PADD 2 increased by 300,000 bbl to 61.1 million bbl in the week ended February 21, according to U.S. Energy Information Administration data released Wednesday (2/25).

The build in Midwest gasoline stocks left inventories near a two-year high, just below the 61.6 million bbl recorded in the week ended February 2, 2024, and 900,000 bbl above the 60.2 million bbl reported in the corresponding week last year, EIA data showed.

Market participants will continue monitoring early Cycle 1 nominations and end-of-month positioning for further direction in Midwest basis values.

SF CARBOB Regular Basis Sinks by 9cts to April Pipeline Cycle

San Francisco CARBOB gasoline basis dipped on Wednesday (2/25) as the product transitioned to April pipeline timing and despite inventory levels recorded a draw last week. 
March San Francisco CARBOB regular basis dropped by 9cts to a 26cts premium to April NYMEX RBOB futures after a trade was reported at that level. San Francisco CARBOB premium basis dropped in tandem by 9cts to a 49cts premium.

Motor gasoline stocks in PADD 5 fell for a third consecutive week by 500,000 bbl to 29.8 million bbl in the week ending February 20. Gasoline inventories were at 29.4 million bbl in the same week last year. Gasoline imports climbed by 45,000 bpd to 168,000 bpd, but they were lower at 132,000 bpd the same week last year.

Flint Hills Reports Flaring at Corpus Christi, TX Refinery

Flint Hills Resources (FHR) reported an emission event at its 269,000 bpd Corpus Christi West, Texas refinery affecting the First Flaring System and the Plant Flare system at the location, according to a report filed with the Texas Commission on Environmental Quality (TCEQ) on Tuesday (2/24).

The incident began at approximately 8:12 a.m. on February 24 and ended at 12:12 a.m. on February 25 and originated from the facility’s First Stage Flare system. “The cause of the event is currently under investigation,” the company reported.

The flaring event released an estimated 3,400 pounds of sulfur dioxide, 100 pounds of unspeciated volatile organic compounds and 36 pounds of benzene – all of which exceeded permitted emission limits of zero pounds each, the file reported to the TCEQ stated.

“Upon identification of the incident, FHR initiated prompt measures to assess and minimize emissions as practicable. The flaring event is currently ongoing,” according to the report.

The incident remains listed as open.

EIA: PADD 2 Gasoline Stocks Remains at 2-Year High

Midwest (PADD 2) gasoline inventories remained at a two-year high last week during the week ended February 20, while distillate stocks declined and crude oil balances increased, according to U.S. Energy Information Administration data released Thursday. 

Motor gasoline inventories in PADD 2 increased by 300,000 bbl to 61.1 million bbl during the reference week, keeping stocks at their highest level since the week ended February 02, 2024, when inventories reached 61.6 million bbl, EIA data showed. Compared with the corresponding week last year, gasoline inventories were up 900,000 bbl from 60.2 million bbl. Total motor gasoline imports averaged 2,000 bpd, down from 26,000 bpd the previous week and below 22,000 bpd recorded in the corresponding week of the prior year. 

Distillate fuel oil inventories in the Midwest fell by 500,000 bbl to 28.8 million bbl on the week and were 5.9 million bbl below the 34.7 million bbl reported in the same week of the prior year. Distillate fuel oil imports averaged 4,000 bpd, down from 15,000 bpd the previous week and below 16,000 bpd reported in the same week of the prior year. 

Jet fuel inventories in PADD 2 were flat on the week at 7.9 million bbl. Stocks were 200,000 bbl above volumes recorded in the same week of the prior year. Jet fuel imports were unchanged at zero bpd in line with the prior week. 

Crude oil inventories in PADD 2 increased by 700,000 bbl to 107.2 million bbl during the profiled week and were 200,000 bbl below volumes recorded in the corresponding week of the prior year. Crude oil imports into the Midwest averaged 3.04 million bpd during the reference week, up from 2.942 million bpd the prior week and above 2.933 million bpd reported in the same week of the prior year. 

Refinery utilization in the Midwest eased to 86.1% of operable capacity from 94.9% the prior week.

EIA: PADD 1 Gasoline & Distillates DN, Jet Up

East Coast (PADD 1) gasoline inventories declined last week, while distillate stocks also fell and jet fuel inventories increased in the week ending February 20, according to data released by the U.S. Energy Information Administration on Wednesday (2/25).

Motor gasoline stocks in PADD 1 fell by 800,000 bbl to 65.1 million bbl in the reference week and were below 67 million bbl seen in the same week last year. Gasoline imports declined to 361,000 bpd on a net input basis and were above the 286,000 bpd imported in the same week last year.

Distillate fuel inventories declined by 400,000 bbl to 25.6 million bbl week-over-week, below 28.8 million bbl in the same week last year. Distillate imports averaged 392,000 bpd, up from 162,000 bpd the previous week and above the 342,000 bpd reported in the same week last year.

Jet fuel inventories in PADD 1 increased by 100,000 bbl to 9.5 million bbl in the week ending February 20 and were below 10.5 million bbl in the same week last year. The East Coast imported 7,000 bpd of jet fuel  in the profiled week, down from 13,000 bpd the previous week and below 53,000 bpd reported year over year, EIA data showed.

Crude oil inventories on the East Coast climbed by 800,000 bbl to 8.3 million bbl in the respective week and were above the 6.9 million bbl recorded in the same week last year. Crude oil imports averaged 834,000 bpd, up from 162,000 bpd the prior week and above the 342,000 bpd reported in the same week last year.

EIA: PADD 3 Gasoline Stock Flat; Distillate, Jet Fuel Down

U.S. Gulf Coast gasoline inventories were unchanged last week while distillate and jet fuel stocks fell, Energy Information Administration data showed on Wednesday (2/25).

Motor gasoline inventories in the PADD 3 region stood at 89.6 million bbl during the week ended February 20, the same as the prior week ended February 13, according to the EIA’s Weekly Petroleum Status Report. Year-on-year, gasoline stocks in the region were down 7 million bbl.

Refining utilization in the Gulf Coast rose to 91.1% from 90.4% the prior week, according to EIA data.

PADD 3 gasoline imports were at 32,000 bpd last week compared to the nil imports in the prior week and 22,000 bpd in the same week of last year.

Crude imports (PADD 3)  rose by 34,000 bpd to 1.536 million bpd on the week and were 217,000 bpd higher year-on-year, due in part to increasing imports of Venezuelan crude into the region.

Jet fuel stocks in the Gulf Coast fell by 1.1 million bbl to 12.9 million and were 1.2 million bbl lower from a year ago.

Distillate fuel oil inventories in the same region fell by 100,000 bbl to 48.7 million bbl during the week profiled and were 7.7 million higher than the volume reported in same period of last year, EIA data showed. 

As a net exporter of distillates and jet fuel, PADD 3 does not report imports of those products. 

EIA: PADD 5 Gasoline Stocks See Third Weekly Decline

West Coast (PADD 5) gasoline inventories fell for a third consecutive week, while distillate stocks climbed and jet fuel inventories fell in the week ending February 20, according to data released by the U.S. Energy Information Administration on Wednesday (2/25).

Motor gasoline stocks in PADD 5 fell by 500,000 bbl to 29.8 million bbl in the reference week and were above 29.4 million bbl seen in the same week last year. Gasoline imports climbed by 45,000 bpd to 168,000 bpd, but they were lower than 132,000 bpd imported in the same week last year.

Distillate fuel inventories climbed by 900,000 bbl to 12.4 million bbl week-over-week, above 11.6 million bbl in the same week last year. Distillate imports fell by 11,000 bpd to 6,000 bpd, still higher than the 5,000 bpd reported in the previous year.

Jet fuel inventories in PADD 5 fell by 500,000 bbl to 11.2 million bbl in the week ending February 20 and were lower than 11.6 million bbl in the same week last year.

Jet fuel imports fell by 38,000 bpd to 105,000 bpd on the week, above 68,000 bpd in the same week last year.

Crude oil inventories in the West Coast region climbed by 300,000 bbl to 48 million bbl in the respective week and were slightly up from 48.1 million bbl recorded in the same week last year. Crude oil imports fell by 287,000 bpd to 774,000 bpd, below the 1.046 million bpd reported the same week last year.

EIA: U.S. Crude Stocks Surge 16M Bbl; Products Down

U.S. commercial crude oil stocks had their largest weekly jump in three years last week while gasoline and distillate inventories fell for a second consecutive week, Energy Information Administration (EIA) data showed Wednesday (2/25).

Crude stocks surged by 16 million bbl to 435.8 bbl during the week ended February 20, the EIA Weekly Petroleum Status Report showed. The agency’s historical data showed that to be the largest weekly build in crude since the week ended February 10, when the EIA reported an increase of 16.3 million bbl.

The EIA’s reporting of oil inventories has swung wildly over the past month in the wake of two major snow blizzards that blanketed much of the U.S. Midwest and Northeast.

Storm Fern, which broke out on January 23, disrupted an estimated production of between 1.5 million and 2 million bpd in the Permian Basin over several days.

No assessment has been made yet on the impact of Winter Storm Hernando, which landed on Feb. 23 – three days after the EIA’s latest inventory reporting period – though analysts said output outages may be inevitable.

Last week’s crude stock rise was accompanied by a 900,000 bbl build at the Cushing, Oklahoma delivery point for NYMEX West Texas Intermediate futures. In the prior week, Cushing inventories saw a drop of 1.1 mln bbl.

Total motor gasoline inventories fell by 1.0 million bbl to 254.8 million, adding to the previous week’s slide of 3.3 million bbl. The back-to-back decline in gasoline balances ended a prior streak of 13 weekly builds in the product between November and February.

Blending components for gasoline slid by 500,000 bbl to 241 million, adding to the prior weekly drop of 2.3 million. Conventional gasoline stocks fell by 1.6 million bbl to 13.8 million bbl after the prior slip of 800,000 bbl.

Distillate fuel oil inventories retreated by 300,000 bbl, on top of the previous week’s 4.6 million tumble.

Refinery utilization fell to 88.6% of operable capacity, versus a prior 91%, amid the maintenance season typical at crude processing plants during this time of year. Crude oil inputs into refineries averaged 15.66 million bpd, compared with the previous 16.08 million.

Crude oil exports averaged 4.3 million bpd, down 277,000 bpd from the prior week, while crude imports rose by 135,000 bpd to 6.66 million.

Total products supplied over the last four weeks averaged 21.023 million bpd, up 3.4% from the same period a year earlier. Gasoline demand last week averaged 8.4 million bpd, up 0.8% from the same period last year, while distillate demand averaged 4.137 million bpd, higher by 0.1% from the same period last year.

EIA: U.S. Ethanol Output Jumps 3% Y-o-Y for 2nd Straight Week

The Energy Information Administration reported on Wednesday (2/25) that overall ethanol production in the United States averaged 1.113 million bpd in the week ending February 20, down 5,000 bpd week-on-week and 32,000 bpd, or 3% higher than in the same week last year.

Four-week average output at 1.127 million bpd was 23,000 bpd above the same four weeks last year.

Midwest ethanol production averaged 1.06 million bpd, up 2,000 bpd week-on-week and 27,000 bpd, or 2.6% higher than in the same week last year. Four-week average output at 1.07 million bpd was 24,000 bpd above the same four weeks last year.

Ethanol blending activity in the U.S. averaged 866,000 bpd, down 0,000 bpd week-on-week and 20,000 bpd, or 2.4% higher than in the same week last year. Four-week average blending demand at 853,000 bpd was 6,000 bpd above the same four weeks last year.

Blender inputs at the East Coast were up 2,000 bpd on the week while inputs in the Midwest were down 1,000 bpd, up 9,000 bpd on the Gulf Coast and down 11,000 bpd on the West Coast.
Domestic ethanol inventories ended the week at 25.646 million bbl, up 58,000 bbl week-on-week and 1.925 million bbl, or 7% lower than in the same week last year.

East Coast PADD 1 inventories ended the week at 7.32 million bbl, down 224,000 bbl week-on-week and 939,000 bbl, or 11.4% lower than in the same week last year.

Midwest PADD 2 inventories ended the week at 10.441 million bbl, down 153,000 bbl week-on-week and 719,000 bbl, or 6.4% lower than in the same week last year.

Gulf Coast PADD 3 inventories ended the week at 4.806 million bbl, up 433,000 bbl week-on-week and 435,000 bbl, or 8.3% lower than in the same week last year.

West Coast PADD 5 inventories ended the week at 2.69 million bbl, up 14,000 bbl week-on-week and 102,000 bbl, or 3.9% higher than in the same week last year.

EIA: Propane/Propylene Stocks Rise 25.3% Y-o-Y

The Energy Information Administration reported on Wednesday (2/25) total domestic propane/propylene stocks of 77.269 million bbl in the week ending February 20, down 5.447 million bbl week-on-week and 18.411 million bbl, or 31.3% higher than in the same week last year.

Data show propane/propylene exports last week averaged 1.871 million bpd, down 46,000 bpd week-on-week and 212,000 bpd, or 12.8%, higher than in the same week last year.

Implied demand for propane/propylene in the United States averaged 1.777 million bpd, up 242,000 bpd week-on-week and 277,000 bpd, or 18.5% higher than in the same week last year.

EIA reports domestic propane/propylene production averaged 2.686 million bpd, up 334,000 bpd week-on-week and 77,000 bpd, or 3% higher than in the same week last year.

East Coast PADD 1 inventories ended the week at 4.1 million bbl, down 807,000 bbl week-on-week and 829,000 bbl, or 25.3% higher than in the same week last year.

Midwest PADD 2 inventories ended the week at 15.702 million bbl, down 1.564 million bbl week-on-week and 1.796 million bbl, or 12.9% higher than in the same week last year.

Gulf Coast PADD 3 inventories ended the week at 53.557 million bbl, down 2.821 million bbl week-on-week and 15.449 million bbl, or 40.5% higher than in the same week last year.

Combined inventories in the Rockies and the West Coast, PADD 4 and 5, ended the week at 3.91 million bbl, down 255,000 bbl week-on-week and 337,000 bbl, or 9.4% higher than in the same week last year.

MCM Energy Buys Battalion Oil Delaware Assets for $160M

MCM Energy Partners announced on Wednesday (2/25) it has completed the acquisition of Battalion Oil Corp’s Delaware Basin crude oil and natural gas assets for approximately $160 million.

The deal includes 40,000 net acres in the Permian Basin and daily production of approximately 10,000 bpd of oil equivalent, MCM said in a statement.

The company plans to accelerate development in the region by leveraging high-quality drilling inventory and existing infrastructure to maximize efficiency.

This transaction will allow Battalion to significantly reduce its debt obligations while focusing on its core operational footprint elsewhere.