MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for March 12th:

Updated at 5:00 PM ET 

HEADLINES:

— Midwest ULSD Basis Weakens as Energy Markets Resume Rally

— SF CARBOB Regular Basis Plummeted 27cts Amid Low Demand

— EIA: U.S. Imports of Venezuelan Oil Up for 2nd-Straight Wk

— EIA: US NatGas Storage Reports 38 Bcf Weekly Withdrawal

— CEC: California Gasoline Stocks Spike 491K Bbl on Week

— CEC: California Diesel Stocks Climb 196K Bbl on Week

— Analysis: Historic IEA Reserves Release Faces Hurdles

— Analysis: EIA: Prices To Drive U.S. Output to Record Highs

— U.S. Trade Deficit Shrank 25.3% in January

— U.S. Rack ULSD Rebounds 24.9cts as Oil Climbs to $100 bbl

Midwest ULSD Basis Weakens as Energy Markets Resume Rally

Midwest ultra-low sulfur diesel (ULSD) basis weakened Wednesday (3/11) as regional cash markets adjusted while broader energy markets resumed an uptrend amid sharp moves in crude and refined product futures that kept the distillates complex volatile.

Chicago ULSD basis weakened 18cts on the session to a 48cts discount to April NYMEX ULSD futures, while the same product moving through the Buckeye Complex and the Wolverine pipeline weakened by 11cts to a 41cts discount, according to DTN data. In the Group 3 market, ULSD, commonly referred to as “X,” weakened 8cts to a 55cts discount.

“This is a very volatile market right now, and cash markets are still trying to adjust to the constant shift in news and price swings,” a source familiar with the Midwest market said. “When crude and product futures move this aggressively, basis tends to react as traders recalibrate replacement costs and reassess short term supply conditions.”

In the futures market, the April ULSD contract traded at $3.9608 gallon, up 28.20cts, or 7.67%, on the session after reaching an intraday high of $4.0171. The strong advance reflects the sharp rebound across the distillates complex as energy markets react to ongoing geopolitical developments.

The widening discounts suggest Midwest cash markets are reacting primarily to the rebound in crude and ULSD futures rather than a sudden change in regional supply fundamentals. Large moves in those contracts often ripple through regional distillate markets as participants reposition around rapidly shifting flat price levels.

SF CARBOB Regular Basis Plummeted 27cts Amid Low Demand

The basis for reformulated gasoline California Air Resources Board fuel standards retreated Thursday (3/12) in Los Angeles from levels seen in the previous trading session, amid low demand and as RBOB futures prices soared due to the escalation of the Iran war.

Meanwhile, prompt San Francisco CARBOB regular basis dropped by 27cts to a 45cts premium to April NYMEX RBOB futures after a trade was confirmed at that level. San Francisco CARBOB premium basis slipped in tandem by 27cts to a 65cts premium.

West Coast gasoline prices remained under pressure as regional inventories fell by 400,000 bbl to 28.3 million bbl in the week ended March 6, though they were 300,000 bbl higher compared to the same week last year. Gasoline imports in the region amounted to 189,000 bpd in the reference week compared to 22,000 bpd last week, but higher by 102,000 bpd in the same week of the prior year.

Refinery utilization in PADD 5 rose to 83.8% last week compared to 79.6% the previous week, EIA data showed.

EIA: U.S. Imports of Venezuelan Oil Up for 2nd-Straight Wk

U.S. imports of Venezuelan crude rose for the second consecutive week, while purchases of Mexican crude hit a two-month low during the week ended March 6, most recent data from the U.S. Energy Information Administration showed.

Venezuelan oil arrivals rose by 89,000 bpd to 232,000 bpd on the profiled week and were 84,000 bpd higher than the volume imported in the same week last year, according to data from the  EIA’s Weekly Petroleum Status Report released Wednesday (3/11) .

Shipments of Venezuelan grades to the U.S. have risen since January after U.S. forces captured Venezuela’s President Nicolas Maduro, resulting in the creation of an interim administration that has ceded custodianship of Venezuelan oil to the White House. 

While Venezuelan imports are rising, U.S. imports of Mexican crude dropped by 105,000 bpd to 140,000 bpd in the week ended March 6. This was the lowest volume recorded so far this year and since December 26, when they were 71,000 bpd. 

Year-over-year, Mexico’s crude shipments fell by 173,000 bpd, the EIA data showed.

Such decline is driven by state-owned Pemex’s policy of prioritizing domestic refining to meet government mandates for energy sovereignty. Imports from Colombia, Ecuador and Brazil saw steep declines on the week, following a similar trend to Mexico’s. 

Other major import sources saw significant shifts as market participants tracked supply risks amid the ongoing conflict in the Middle East. Canadian crude shipments expanded by 297,000 bpd to 4.227 million bpd, above the 3.940 million bpd recorded in the same week of last year. 

U.S. imports of Saudi Arabian crude climbed by 87,000 bpd to 607,000 bpd and were above 277,000 bpd reported in the same week last year.

Iraqi shipments increased by 155,000 bpd to 309,000 bpd during the reference week, but were nearly half the volume imported in the same week of last year, when it amounted to 170,000 bpd.

These flows from the Middle East remain under intense scrutiny as the regional war, which has shuttered the Strait of Hormuz, continues to threaten a critical artery for one-fifth of global petroleum cargoes.

Nigeria’s imports also retreated in the reference week, falling by 46,000 bpd to 156,000 bpd, compared to zero imports reported in the same week of last year, as the country struggles with persistent structural constraints and upstream disruptions

EIA: US NatGas Storage Reports 38 Bcf Weekly Withdrawal

Energy Information Administration data released midmorning Thursday show a 38 billion cubic feet withdrawal into U.S. natural gas storage to 1.848 trillion cubic feet in the week ended March 06.
Natural gas in U.S. storage is 8.3% higher than last year and 0.9% below the five-year average of 1.865 Tcf.
Regionally, EIA reports the East registered a 28 Bcf withdrawal to 294 Bcf, 5.8% less than a year ago and 17.9% lower than the five-year average.
Natural gas in storage in the Midwest decreased 22 Bcf week-on-week to 375 Bcf, a 0.3% surplus compared to the same week a year ago and 16.1% lower than the five-year average.
Mountain region natural gas in storage increased 2 Bcf, up 21.2% year-on-year to 60% above the five-year average.
South Central storage rose 9 Bcf to 721 Bcf, 9.2% more than in the same week last year and 5.6% below the five-year average.

CEC: California Gasoline Stocks Spike 491K Bbl on Week

California Energy Commission data show statewide gasoline inventories climbed in the week ending March 6, as the agency now reports only statewide totals in its Weekly Fuels Report released Thursday (3/12) .
Statewide gasoline stocks, including CARB reformulated, non-California, and blending components, increased by 491,000 bbl to 10.334 million bbl , falling 11%  lower than the 11.595 million bbl recorded last year.
Statewide gasoline production increased by 251,000 bbl to 5.068 million bbl, though production fell 6% from the 5.377 million bbl produced in the same week last year.
The California Energy Commission currently publishes only statewide gasoline inventory and production data and no longer provides regional Northern and Southern California breakdowns.

CEC: California Diesel Stocks Climb 196K Bbl on Week

California Energy Commission data show statewide diesel inventories climbed in the week ending March 6, as the agency now reports only statewide totals in its Weekly Fuels Report released Thursday (3/12).
Statewide CARB diesel and other diesel fuel stocks increased by 196,000 bbl to 2.867 million bbl in the respective week, but slipped by 5% from the 3.011 million bbl recorded last year.
Statewide diesel production dropped by 105,000 bbl to 1.442 million bbl in the reference week, and declined 13% from the 1.659 million bbl produced in the same week the previous year.
The California Energy Commission currently publishes only statewide diesel inventory and production data and no longer provides regional Northern and Southern California breakdowns.

Analysis: Historic IEA Reserves Release Faces Hurdles

With much of the Middle East’s oil trapped at home, the West’s biggest consuming nations have committed to the largest release ever of their emergency reserves. But the action will only mitigate half of the current supply deficit, requiring more workarounds by both crude exporters and refiners.

The International Energy Agency (IEA), which represents 32 oil consuming nations, announced Wednesday (3/11) a historic 400 million-bbl reserves release from its holding of around 1.2 billion bbl to cushion the supply shortfall triggered by the U.S.-Israel war with Iran.

The Paris-based IEA was founded in 1974 in response to the OPEC oil embargo a year before that which caused the first major shock to global oil supplies. It has coordinated five stockpile releases prior to this – one each in 1991, 2005 and 2011, and twice in 2022.

The one it has just committed to will dwarf the 182 million bbl released in response to Russia’s invasion of Ukraine four years ago. The majority would come from the U.S. Strategic Petroleum Reserve, which has a maximum drawdown capacity of 4.4 million bpd.

But the relief might not be felt immediately, as the oil takes thirteen days to reach the market, according to the U.S. Department of Energy.

While a major headline figure, the IEA release will be spread over two months, supplying 5 to 6.7 million bpd, representing approximately half of the currently disrupted flows.

Simultaneously, Saudi Arabia and the UAE are pivoting exports toward ports outside the Persian Gulf, primarily leveraging the Red Sea’s Yanbu terminal. Though loadings at Yanbu have doubled to over 2 million bpd, operational constraints and pipeline capacities limit total diversion to around 4.5 million bpd.

These efforts are critical, as the closure of the Strait of Hormuz – which typically handles 21 million bpd of petroleum liquids – has forced producers to throttle output by 10 million bpd so far, according to IEA estimates. While vast commercial and strategic global inventories, currently at a five-year high 8.2 billion bbl, can provide a significant buffer for domestic refiner intake, they cannot offset the prolonged loss of production from other Middle Eastern exporters.

The situation is further complicated by the stranding of 5 million bpd of refined products in the Persian Gulf and the suspension of regional refinery operations due to damage from Iranian attacks. Consequently, the disruption to fuel supply is likely to persist longer and prove more severe than the challenge to crude oil flows, as the restoration of both production and logistics will likely require weeks once shipping lanes finally reopen.

Analysis: EIA: Prices To Drive U.S. Output to Record Highs

Expectations of an oversupplied market and falling prices moving into this year had many analysts forecasting little to no growth in U.S. shale. Given the recent surge in oil prices and indications that the current supply shortage may last longer than expected, U.S. crude oil production may still be far from peaking.

The Energy Information Administration just last month forecasted U.S. crude oil production to have peaked in 4Q2025 at 13.83 million bpd, before gradually easing to 13.56 million bpd by the fourth quarter of 2026 and 13.2 million bpd by the end of 2027 as oil prices slipped below break-evens for many domestic producers.

The most serious supply disruption in history is changing this calculus. Oil prices have already been moving higher in the first two months of the year amid intensifying saber-rattling between the U.S., Israel and Iran. The closure of the Strait of Hormuz, which cut the world off a fifth of global petroleum liquids supply, has sent prices rocketing in March. WTI futures were trading at the highest in three and a half years, rendering drilling in the U.S. shale patch much more profitable.

The EIA in its latest short-term energy outlook published Tuesday (3/10) adjusted U.S. crude production forecasts higher and now sees it peaking in 2027. For this year, the upward revision was negligible as production isn’t expected to pick up before the fourth quarter given the typical delay between price movements and production. The new forecast has U.S. crude output average 13.9 million bpd in the first half of 2027 and 13.83 million bpd over the whole year, marking a 3.8% upward revision from the prior estimate.

The price impact on production will not be immediately visible given the long path from finalizing business decisions to drilling to extracting the first barrel. Oil prices are likely to stay elevated for long enough to justify new wells. U.S. crude output, which the EIA just in February estimated to shrink by 2%, is now forecasted to expand by 1.6% between 2026 and 2027.

U.S. Trade Deficit Shrank 25.3% in January

The U.S. trade deficit shrank in January amid a surge in exports, Commerce Department and U.S. Census Bureau data showed Thursday (3/12).

The U.S. goods and services deficit stood at $54.5 billion in January, down by $18.4 billion, or 25.3%, from a revised $72.9 billion in December, the Bureau of Economic Analysis, a unit within the Commerce Department, said in statement.

The decrease came as the services surplus grew by $1 billion and the goods deficit shrank by $17.5 billion month-on-month to $81.8 billion.

In January, U.S. imports decreased $2.6 billion month-on-month to $356.6 billion, while exports rose $15.8, or 5.5%, to $302.1 billion, the BEA release showed. More than half of the increase in goods exports came from precious metals.

Year-on-year, the trade deficit was down $73.9 billion, or 57.6%.

U.S. Rack ULSD Rebounds 24.9cts as Oil Climbs to $100 bbl

Wholesale rack prices for ultra-low sulfur diesel (ULSD) across the United States moved sharply higher Thursday (3/12), resuming the week’s upward trend on expectations of tighter global supplies after tanker attacks in the coast of the Persian Gulf forced the closure of some oil terminals. 

Nationwide ultra-low sulfur diesel (ULSD) rack prices averaged $3.6718 gallon, rising 24.88cts from Wednesday’s $3.4230 gallon, according to DTN data. The rebound follows Wednesday’s steep decline after diesel racks surged more than $1 gallon during last week’s rally in crude and refined product futures.

Conventional unleaded gasoline rack prices averaged $2.9019 gallon, an increase of 14.22cts from Wednesday’s $2.7597 gallon, reversing the previous session’s decline as gasoline markets tracked higher futures prices.

ULSD racks moved higher across all five PADDs. The largest increase occurred in PADD 5, where prices climbed 29.34cts to $4.2441 gallon. PADD 1 rose 28.30cts to $3.8051 gallon, followed by PADD 3, up 26.55cts to $3.6101 gallon. PADD 4 increased 21.08cts to $3.6292 gallon, while PADD 2 posted the smallest rise, gaining 18.29cts to $3.4671 gallon.

Relative to the national ULSD rack average of $3.6718 gallon, PADD 5 held the strongest premium at 57.23cts, followed by PADD 1 at 13.33cts above the U.S. benchmark. PADD 4 and PADD 3 traded slightly below the national average at 4.26cts and 6.17cts discounts, while PADD 2 stood 20.47cts below the national average, respectively.

On gasoline racks, PADD 3 posted the largest increase, rising 20.89cts to $2.5568 gallon, followed by PADD 2, up 16.39cts to $2.4932 gallon. PADD 4 climbed 14.77cts to $2.7253 gallon, while PADD 5 increased 14.53cts to $3.3809 gallon. PADD 1 saw the smallest gain, rising 14.05cts to $2.5694 gallon, the same data showed.

Compared with the national gasoline average of $2.9019 gallon, all PADDs traded at a discount except PADD 5, which stood at a 47.90cts premium to the U.S. benchmark. The deepest discount was seen in PADD 2 at 40.87cts below the national average, followed by PADD 3 at 34.51cts, PADD 1 at 33.25cts, and PADD 4 at 17.66cts below the benchmark.

In the futures market, refined products also moved higher alongside crude benchmarks. The front month NYMEX ULSD April contract traded at $3.9404 gallon, up 26.16cts, while NYMEX RBOB gasoline for April rose 10.72cts to $2.8955 gallon. Meanwhile, WTI crude traded at $93.20 barrel, up $5.97, as markets continued to react to shifting geopolitical risk tied to developments in the Middle East.