MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News May 14th:

Updated at 5:00 PM ET 

HEADLINES:

— Chicago ULSD Flat to Futures Benchmark on Stockpile Drop

— USWC Summer Gasoline Shift Raises Supply Risks

— U.S. Congress Passes E15, Moving Bill to Senate

— EIA: US NatGas Storage Reports 85 Bcf Weekly Injection

— CEC: California Diesel Stocks Fall 270,000 Bbl

— CEC: California Gasoline Stocks Rise 282,000 Bbl

— AAR: Petroleum Carloads Up 10.6% for Week Ended May 9

NEWS:

Chicago ULSD Flat to Futures Benchmark on Stockpile Drop

Chicago ultra-low sulfur diesel was assessed flat to front-month ULSD on NYMEX on Thursday (5/14) as traders adjusted to federal data showing a decline in Midwest distillate inventories.

Chicago ULSD’s basis to June NYMEX ULSD was called at Merc levels following a 1cent discount to the same benchmark in the previous trading session. .

ULSD basis on the Buckeye Storage Complex, located in northern Indiana, and the Wolverine pipeline – which stretches from the Chicago area to Michigan – was at a premium of 25cts gallon.  The ULSD basis for Buckeye climbed 16cts from the prior session, while for Wolverine, it was unchanged.

ULSD in Midwest’s Group 3 was at a premium of 10cts after a discount of 1cts on Wednesday.

Midwest distillate stocks dropped by 700,000 bbl during the week ended May 8 to 24.2 million bbl, while remaining above the 23.8 million bbl reported a year ago, the U.S. Energy Information Administration (EIA) said in inventory data released Wednesday.

In jet fuel, the basis in Chicago was at a negative 12cts gallon to NYMEX ULSD, improving from the prior session’s discount of 20cts.

Jet fuel in Group 3 weakened to a discount of 27cts gallon from Wednesday’s 25cts.

Jet fuel inventories in the Midwest dipped by 200,000 bbl to 7 million bbl last week but remained above the 7.1 million bbl witnessed in the same week last year, the EIA said.

USWC Summer Gasoline Shift Raises Supply Risks

The U.S. West Coast gasoline market is entering the summer driving season under growing pressure as tighter fuel specifications, refinery closures and geopolitical risks combine to create a more fragile supply system heading into peak demand months.

California’s transition to lower Reid Vapor Pressure (RVP) gasoline blends is adding another layer of complexity for refiners already operating with reduced capacity. During the summer months, refiners must produce cleaner-burning gasoline with lower volatility to meet California Air Resources Board standards designed to reduce evaporative emissions during hotter weather.

The lower-RVP gasoline is more expensive to manufacture because refiners must limit the use of cheaper blending components such as butane while relying on tighter blendstock specifications.
The seasonal fuel quality shift comes as the region has lost key refining capacity over the past year. Phillips 66 shut its 139,000 bpd Los Angeles refinery in late 2025, while Valero has been idling its Benicia refinery through a phased shutdown process that began earlier this year. The Benicia refinery, which processes roughly 145,000 bpd of crude oil, had been a major supplier of gasoline into Northern California markets.

Other large facilities, including Chevron’s El Segundo and Richmond refineries, Marathon Los Angeles and PBF’s Torrance and Martinez plants, continue operating but some of them have also planned turnaround in the first half of the year.

USWC fuel traders say the system now has far less flexibility to absorb outages or unplanned disruptions during summer demand season.

Last year, Chevron’s El Segundo refinery experienced some of the region’s most intense flaring activity after a fire at the Isomax 7 unit forced multiple operational shutdowns and tightened jet fuel supply across the West Coast.

While refinery flaring activity across the USWC has eased compared with late 2025, traders argue the decline reflects reduced refinery operations rather than improved system stability.
The tighter refining system has already started surfacing in prices. Since the start of the Iran conflict on February 28, Los Angeles ULSD spot values have climbed roughly 68%, while Los Angeles jet fuel and CARBOB gasoline values have increased about 59%, according to DTN pricing data.

Retail fuel prices have also strengthened sharply across the region. West Coast regular gasoline averaged roughly $5.22 gallon in early May, according to Energy Information Administration data, marking the highest level since October 2022 during the Russia-Ukraine energy crisis.

The U.S. Senate is, meanwhile, expected to vote next on a Congress-approved bill to permit year-round nationwide sales of E15, the gasoline with 15% ethanol versus the regular E10, which contains10% ethanol. While proponents argue the discounted blend could lower costs, California refiners note that aligning the federal mandate with the state’s rigorous CARBOB and Tier 3 standards remains a significant technical and regulatory hurdle.

Inventories and imports

Inventories heading into summer also remain relatively tight. EIA data showed PADD 5 gasoline inventories increased by 100,000 bbl to 28.3 million bbl during the week ended May 8, after rising the prior week. Gasoline imports in the region fell by 131,000 bpd to 121,000 bpd last week and were 127,000 bpd lower compared with the same week last year.

Last summer, West Coast gasoline inventories climbed above 30 million bbl during parts of June and July as refiners increased seasonal gasoline production.

Imports are expected to play a key role balancing the market this year. California Energy Commission (CEC) data show the state imported gasoline and blending components from countries including South Korea, India, Taiwan, the Bahamas and several European suppliers last year as refiners supplemented local production.

The region also continues relying heavily on imported crude feedstocks. According to CEC data, Brazil, Iraq, Guyana, Canada and Ecuador ranked among the largest crude suppliers into California last year, with Canadian medium and heavy grades remaining important for optimizing gasoline and diesel yields at complex West Coast refineries.

The escalation involving the Strait of Hormuz could further amplify gasoline price risks for California drivers, who already face some of the nation’s highest fuel prices due to stricter fuel standards and limited refining capacity. With the extension of the Iran conflict, underlying supply conditions remain increasingly fragile as the USWC fuels market moves deeper into summer-grade gasoline production.

U.S. Congress Passes E15, Moving Bill to Senate

U.S. lawmakers are preparing to submit a Senate vote for legislation passed by the House to permit year-round nationwide E15 sales, offering a discounted fuel option for consumers facing surging pump prices linked to the Middle East conflict.

The House of Representatives passed on Wednesday (5/13) the Nationwide Consumer and Fuel Retailer Choice Act, which permits all-year federal sales of E15, in a 218-203 vote. The E15 contains 15% ethanol compared with the regular E10 gasoline with 10% ethanol.

The American Petroleum Institute (API), in a statement issued Wednesday, said the legislation will allow retailers to offer the discounted E15 while preserving E10 availability, enabling consumers to have a choice.

API said it joins “a broad coalition of energy producers, small refiners, biofuel stakeholders, agriculture groups, fuel retailers, and equipment manufacturers in urging lawmakers to advance this legislation.”

The bill now moves to the Senate, where it requires 60 votes to overcome a likely filibuster and secure final passage despite the House victory.

Proponents argue that expanded E15 access will boost biofuel demand and reduce pump prices following recent market spikes linked to the Middle East conflict. The average pump price for the E15 nationwide is $4.50 gallon, up from $3.25 a year ago, data from the U.S. Energy Information Administration (EIA) showed.

Conversely, some sections of the refining sector have expressed concern that a mandate for E15 could increase compliance costs and create additional financial burdens for domestic fuel processors. Opponents also cite a Congressional Budget Office projection that the measure would increase the federal deficit by $2.3 billion through 2036, fueling fiscal concerns among refiners.

Regulatory hurdles in states like California, which require distinct “CARBOB” blends and unique vapor pressure certifications, have also blocked a seamless nationwide rollout of the E15. California gasoline prices are typically the highest in the U.S., with E10 averaging $5.189 gallon in the state and $5.613 in the West Coast, EIA data shows.

EIA: US NatGas Storage Reports 85 Bcf Weekly Injection

Energy Information Administration data released midmorning Thursday (5/14) show a 85 billion cubic feet injection into U.S. natural gas storage to 2.29 trillion cubic feet in the week ended May 8.

Natural gas in U.S. storage is 2.3% higher than last year and 6.5% above the five-year average of 2.15 Tcf.

Regionally, EIA reports the East registered a 27 Bcf injection to 388 Bcf, 0.8% less than a year ago and 0.5% higher than the five-year average.

Natural gas in storage in the Midwest increased 24 Bcf week-on-week to 476 Bcf, a 0% deficit compared to the same week a year ago and 0.8% lower than the five-year average.

Mountain region natural gas in storage increased 3 Bcf, up 12% year-on-year to 44.1% above the five-year average.

South Central storage rose 27 Bcf to 941 Bcf, 1.1% less than in the same week last year and 0.6% above the five-year average.”

CEC: California Diesel Stocks Fall 270,000 Bbl

DAVENPORT, FL (DTN) – California Energy Commission data show statewide diesel inventories declined in the week ending May 8, as the agency now reports only statewide totals in its Weekly Fuels Report released on Thursday (5/14).

Statewide CARB diesel and other diesel fuel stocks fell by 270,000 bbl to 2.266 million bbl, and were 21% below the same week last year.

Statewide diesel production declined by 220,000 bbl to 1.212 million bbl, though production remained 21% below last year’s levels.

CEC: California Gasoline Stocks Rise 282,000 Bbl

California Energy Commission data show statewide gasoline inventories increased in the week ending May 8, as the agency now reports only statewide totals in its Weekly Fuels Report released on Thursday (5/14).

Statewide gasoline stocks, including CARB reformulated, non-California, and blending components, rose by 282,000 bbl to 9.804 million bbl, and were 7% lower than the same week last year.

Statewide gasoline production increased by 19,000 bbl to 4.987 million bbl, though production remained 21% below last year’s levels.

AAR: Petroleum Carloads Up 10.6% for Week Ended May 9

The Association of American Railroads (AAR) reports that petroleum and petroleum product carloads totaled 11,434 during the week ended May 9, up 10.6% from the same week a year ago.

Year-to-date, petroleum and petroleum products carloads totaled 196,463, up 8.7% from the corresponding period of the prior year, an AAR report published on Wednesday (5/13) showed.

Weekly traffic for the profiled week totaled 513,755, up 3.17 from the same week a year ago.

Total carloads for the week ended May 9 reached 229,592, up 3.3% from the same week of last year.

Weekly intermodal volume was 284,163 containers and trailers, up 4.0% from the corresponding week of the prior year.

Year-to-date, U.S. railroads reported carloads at 4,067,235, up 3.6% on the year.

Cumulative intermodal units were 4,982,091, up 0.6% from a year ago.

Total rail traffic for the first 18 weeks of the year was 9,049,326 carloads and intermodal units, up 1.9% on the year.