MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for March 20th:

Updated at 5:00 PM ET 

HEADLINES:

— Los Angeles Jet Fuel Basis Surges 35cts on firm demand

— Los Angeles and SF CARBOB Regular Basis Spike

— CFTC: Speculators Cut Net Longs as WTI Slid Beneath $100

— USGC Refiners Gain as Brent-WTI Spread Hits 6-Yr High

— Baker Hughes: Weekly North America Rig Count Down 21

— Brent-WTI Spread Surges on Middle East Oil Supply Crunch

— BP Locks Out Whiting Refinery Workers Over Contract

— U.S. Rack ULSD Up 30.7cts on Week; Gasoline Mixed 

NEWS:

Los Angeles Jet Fuel Basis Surges 35cts on firm demand 

Los Angeles jet fuel basis gained 35cts on Friday (3/20) to a 55cts premium over May NYMEX ULSD futures, after a trade was confirmed at that level.

The basis of Los Angeles jet fuel  strengthened despite high inventory levels and increasing output reported last week. 

Jet fuel production in the West Coast (PADD 5) increased to 425,000 bpd in the week ended March 13 from 396,000 bpd the prior week, according to Energy Information Agency data released this week.  

In the same region, jet fuel inventories climbed by 500,000 bbl to 11.6 million bbl on a weekly basis and were up by 1.2 million bbl compared to the same week last year. Jet fuel imports increased by 84,000 bpd to 128,000 bpd and were higher by 86,000 bpd year-over-year.

Refinery utilization in PADD 5 declined to 79.8% last week compared to 83.8% the previous week, EIA data showed.

Los Angeles and SF CARBOB Regular Basis Spike

The basis for reformulated gasoline California Air Resources Board fuel standards surged Friday(3/20) in both Los Angeles and San Francisco gasoline, as late trades were confirmed in the spot market.
Los Angeles CARBOB regular basis increased by 10cts to a 45cts premium to April NYMEX RBOB futures after a trade was reported at that level. San Francisco CARBOB regular basis followed the rising trend increasing by 9cts to a 60cts premium to the same benchmark.

Motor gasoline inventories in the West Coast region fell by 900,000 bbl to 27.4 million bbl in the week ending March 13, according to Energy Information Administration data released this week. Stocks were also down by 1.5 million bbl compared to the same week last year. Gasoline imports in the region fell by 16,000 bpd to 173,000 bpd but were higher by 82,000 bpd versus the same week last year.

CFTC: Speculators Cut Net Longs as WTI Slid Beneath $100

Bearish bets in NYMEX West Texas Intermediate crude rose during the week to March 17 as futures of the U.S. oil benchmark tumbled beneath $100 bbl in volatile trading against the backdrop of the Iran war, Commodity Futures Trading Commission (CFTC) data showed Friday (3/20).

Speculative net longs in gasoline and distillates, meanwhile, rose that week. Net shorts in natural gas also declined, indicating a less bearish position.

In WTI, noncommercial long positions fell by 8,883 contracts to 385,768, the CFTC said in its weekly Commitment of Traders report for the week ended March 17.  Noncommercial short positions rose by 444 contracts to 167,080.

This caused net noncommercial longs in WTI to shrink by 9,327 to 218,688.

Open interest in WTI fell by 30,255 contracts to 2,081,576.

Those moves came as the front-month contract in NYMEX WTI tumbled almost 5% on March 16 to a session low of $91.82 bbl on Marcgh 16, a day before CFTC closed its review of trader positions for the week. During the prior week to March 10, NYMEX WTI’s front-month rose to as high as $113.41 bbl.

In NYMEX RBOB gasoline futures, noncommercial long positions rose by 2,401 contracts to 98,800, while short positions fell by 1,241 contracts to 22,205. As a result, the noncommercial net long position widened by 3,642 contracts to 76,595.

Open interest in gasoline was down by 10,699 contracts to 380,579.

Those moves in gasoline came after NYMEX’s front-month RBOB gasoline contract rose a net 17% during the March 11-17 CFTC reporting week.

In NYMEX ULSD futures, noncommercial long positions fell by 1,414 contracts to 42,869, while short positions declined by 3,775 contracts to 27,438. The changes widened the noncommercial net position in ULSD by 2,361 contracts to 15,431.

Open interest in ULSD tumbled by 20,336 contracts to 266,684.

In NYMEX natural gas futures, noncommercial long positions rose by 9,250 contracts to 216,880 while short positions rose by 423 to 394,909. That resulted in the net short position in natural gas to decline to 178,029 from a prior 186,856.

Open interest in natural gas fell by 5,050 contracts to 1,560,291

USGC Refiners Gain as Brent-WTI Spread Hits 6-Yr High

As the Brent-WTI spread surged into double digits this week, U.S. refiners face mixed fortunes amid high volatility and the uncertainty generated by the escalation of the Iran War.  Refiners operating along the Gulf Coast could benefit from cheaper domestic crude and higher prices for their finished product, while West Coast peers remain exposed to costlier imported barrels and refinery closures.

The Brent-WTI spread hit a nearly six-year high this week as pricing of Brent, the global crude benchmark, surged on tightening global oil supplies driven by the longer-than- expected conflict in the Middle East. U.S. crude inventories, meanwhile, approached two-year highs last week, putting downward pressure on WTI.

As of 2:25 p.m. Friday (3/20), the spread was trading between $13 bbl and $14 bbl, versus the $4.75 bbl to $5.00 bbl range during the week ended March 13, representing more than double the prior week’s level.

Year-on-year basis, the spread was even more pronounced. During the same week in March 2025, the Brent-WTI spread averaged approximately $4.51 bbl. Current levels represent three times the increase observed a year earlier.

This week, the spread was at its widest since April 2020, when a short squeeze drove WTI to around minus $40 bbl while Brent remained at nearly plus $25 bbl, resulting in a difference of nearly $65.

At its current level, the spread might work best for U.S. refiners on the Gulf Coast, physically connected to the Permian and Cushing.  The Gulf Coast sits at the terminus of the major North American pipeline networks, such as the Seaway, Keystone, and Permian-to-Gulf lines, allowing these refiners to access inland crude, or WTI, with minimal transport friction.

Also, Gulf Coast refiners benefit by purchasing domestic WTI at sharp discounts to Brent and selling, at higher prices, gasoline, processed diesel and other distillate products to the domestic and export markets.

Moving a barrel via these pipelines costs roughly $1 bbl to $3 bbl, whereas U.S. West Coast refiners must pay significantly more for rail or waterborne shipments.

Refiners on the U.S. West Coast remain most vulnerable, lacking pipeline connectivity to the shale-rich interior and still relying heavily on Brent-linked imports.

The idling of major California refineries will also slash regional capacity by 20%, forcing reliance on costlier waterborne barrels from Asia. The 139,000-bpd Phillips 66 Wilmington refinery in Los Angeles wound down operations late last year while the Valero Benicia refinery is slated to close by April.

Their problem could be alleviated partially by the U.S. Treasury’s two-month long suspension of the Jones Act this week to allow international tankers in joining U.S. vessels to transport oil.

Meanwhile, energy prices have surged broadly in the three weeks since the February 27 start of the U.S.-Israel-Iran war.  Despite the situation in the Middle East, WTI futures prices are expected to remain below Brent as U.S. crude production is relatively insulated from the Iran conflict. This also is expected to support continued builds in U.S. crude stocks, as they have in the past four weeks.

Last week, crude oil stocks reached a near two-year high of 449.3 million bbl, according to Energy Information Administration data. Pipelines from the Permian Basin to the Gulf Coast are currently running at 94%–95% capacity, squeezing exporters from shipping out more.

Baker Hughes: Weekly North America Rig Count Down 21 

North American energy drilling activity tumbled by 21 rigs this week, adding to the prior week’s 6-rig decline, according to Baker Hughes’ weekly rig count report released Friday (3/20).

The report showed the regional rig count at 729 in the current week, compared to 750 recorded the previous week. Rigs for Canada and the U.S. combined were lower than the 773 actively deployed in the same week of last year.

As with recent trends, this week’s change was almost entirely driven by Canada, where rigs fell by 20 to reach 177.

The U.S. rig count itself fell by one, making up the regional decline of 21.

On the U.S. side, rigs in inland waters and offshore were unchanged, at two and 12, respectively.  Rigs on land fell by one to 538.

By trajectory, directional rigs in the U.S. slid by one to 53. Horizontal rigs remained rose by two to 487 while vertical rigs slid by two to stand at 10.

Year-over-year, the weekly U.S. rig count dropped by 41 to 553, compared to the 593 reported for the same week of last year.

Brent-WTI Spread Surges on Middle East Oil Supply Crunch

The Brent-WTI spread has undergone a major widening this week as international pricing outpaces that of U.S. crude from global oil supplies that have come under threat from the escalating conflict in the Middle East.

As of 11:45 a.m. Friday (3/20), the spread was oscillating between $12.50 bbl and $14.00 bbl. This compares to the $4.75 bbl to $5.00 bbl range observed during the previous week ending March 13, representing a 165% increase.

Year-on-year, the divergence was even more pronounced. During the week to March 21, 2025, the Brent-WTI spread averaged approximately $4.51 bbl. Current levels are 210% higher.

BP Locks Out Whiting Refinery Workers Over Contract

BP locked out union workers at its 440,000 bbl Whiting, Indiana, refinery effective March 19 after contract negotiations with United Steelworkers Local 7-1 (USW Local 7-1) broke down, following the union’s earlier rejection of the company’s latest contract offer.  

On March 12, USW Local 7-1 said 94.1% of its membership voted and 98.3% of those voting rejected BP’s “last, best and final” offer.

BP said maintenance workers represented by the union should not report after March 17, while other represented workers were told to report as scheduled through March 18, according to a company statement released on Thursday (3/17).

However, media reports said workers began picketing after the lockout took effect.

BP’s Whiting refinery has roughly 440,000 bpd of capacity, making it the largest refinery in the U.S. Midwest. The plant produces transportation fuels including gasoline, diesel and jet fuel, and is a key supplier into Chicago and broader PADD 2 markets.

Any disruption tied to the labor dispute could affect Chicago ULSD and gasoline basis and the Group 3 supply balance. BP said it does not expect disruption to refinery operations or production.

U.S. Rack ULSD Up 30.7cts on Week; Gasoline Mixed

Wholesale rack prices for ultra-low sulfur diesel continued to strengthen Friday (3/20), while conventional unleaded gasoline and premium grade gasoline were mixed across U.S. regions, as refined product markets remained volatile amid ongoing Middle East supply concerns, even as the White House signaled it has options to help cool crude prices.

Nationwide ULSD rack prices averaged $4.1731 gallon, up 8.15cts from Thursday’s $4.0916 gallon and 30.70cts above Friday, March 13, according to DTN data. Conventional unleaded gasoline rack prices averaged $3.0966 gallon, little changed, down 0.02cts from Thursday’s $3.0968 gallon, but 2.57cts higher than a week earlier. Premium grade gasoline was mixed on the day, with gains in most regions and declines on the West Coast.

ULSD racks increased across all regions Friday. The largest rise came in PADD 5, where prices climbed 12.27cts to $4.9267 gallon. PADD 1 increased 11.35cts to $4.4350 gallon, while PADD 3 rose 9.03cts to $4.2204 gallon. PADD 2 moved 6.59cts higher to $3.7706 gallon, and PADD 4 added 6.22cts to $4.1739 gallon.

Compared with Friday, March 13, ULSD racks were higher in every reported region. PADD 5 showed the largest increase, up 44.97cts, followed by PADD 1, up 39.96cts. PADD 4 increased 38.12cts, and PADD 3 rose 37.17cts. A week-ago comparison for PADD 2 was unavailable because distillate data was not available for March 13.

Relative to the national ULSD rack average of $4.1731 gallon, PADD 5 held the strongest premium at 75.36cts above the U.S. benchmark, followed by PADD 1 at 26.19cts above the national average. PADD 3 and PADD 4 also traded at slight premiums, while PADD 2 remained the deepest discount, at 40.25cts below the benchmark.

On conventional unleaded gasoline racks, the regional picture was mixed Friday. PADD 4 posted the largest increase, rising 3.84cts to $3.0684 gallon, followed by PADD 1, up 1.80cts to $2.8652 gallon, and PADD 3, up 1.67cts to $2.8224 gallon. In contrast, PADD 5 declined 3.57cts to $3.8465 gallon, while PADD 2 slipped 1.13cts to $2.6374 gallon.

Against Friday, March 13, however, conventional unleaded gasoline remained higher across all regions. PADD 4 showed the largest week-over-week increase, up 17.84cts, followed by PADD 5, up 16.59cts, PADD 1, up 11.26cts, PADD 2, up 9.76cts, and PADD 3, up 8.06cts.

Compared with the national conventional unleaded gasoline average of $3.0966 gallon, PADD 5 remained the only region trading at a premium, at 74.99cts above the U.S. benchmark. All other regions held discounts, led by PADD 2 at 45.92cts below the national average, followed by PADD 3 at 27.42cts, PADD 1 at 23.14cts and PADD 4 at 2.82cts below the benchmark.

Premium grade gasoline rack prices were mixed Friday. PADD 4 posted the largest increase, rising 3.76cts to $3.4961 gallon. PADD 1 increased 1.85cts to $3.4889 gallon, while PADD 3 moved 1.73cts higher to $3.4743 gallon. PADD 2 edged up 0.62cts to $3.2171 gallon. PADD 5 was the only region lower, falling 2.92cts to $4.2226 gallon.

Compared with a week earlier, premium grade gasoline prices were still higher across all regions. PADD 4 rose 17.57cts from March 13, while PADD 5 increased 17.51cts. PADD 1 was up 12.07cts, PADD 3 increased 8.51cts, and PADD 2 rose 7.26cts. Premiums to conventional unleaded gasoline were widest in PADD 3 at 65.19cts, followed by PADD 1 at 62.37cts, PADD 2 at 57.97cts, PADD 4 at 42.77cts and PADD 5 at 37.61cts.

Some of the pressure on crude values eased Friday after Treasury Secretary Scott Bessent said the administration had tools available to temper oil prices, including the possibility of allowing more Iranian barrels already on water to reach market and additional releases from strategic reserves. That helped offset some geopolitical support in futures trading, where front-month NYMEX ULSD was at $4.3409 gallon, down 0.11cts, while front-month RBOB gasoline slipped 0.96cts to $3.1175 gallon. WTI crude traded at $95.37 barrel, down 77cts.