MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News May 15th:

Updated at 5:10 PM ET 

HEADLINES:

— USGC ULSD Basis Drops to 1-Month Low

— Midwest Gasoline Basis Tumbles on NYMEX Rally

— Baker Hughes: Weekly North America Rig Count Up by 3

— EPA Proposes 2-Year Delay of Vehicle Emission Standards
— Enterprise Reports Flare at Mont Belvieu Propane Unit

— EIA: U. S. Industrial Natural Gas to Set 2026-2027 Record

— Analysis: Hormuz Jam May Be Tailwind for U.S. Oil Output
— PEMEX Deer Park Refinery Reports Flaring Event

NEWS:

USGC ULSD Basis Drops to 1-Month Low 

U.S. Gulf Coast ultra-low sulfur diesel (ULSD) basis weakened Tuesday (5/12), falling to its lowest level in nearly a month, as strength in New York Harbor futures outpaced gains in the physical market.

USGC ULSD basis was assessed at an 11.75cts discount to June New York Harbor ULSD futures, widening from a prior discount of 7cts, according to DTN Energy data.

It marked the largest discount for USGC ULSD against the NYH benchmark since April 16, when basis was assessed at a minus 12cts.

Friday’s weakening of the basis came as NHY ULSD rallied sharply, rising more than 14cts on the day to settle at $4.0534 gallon.

USGC spot ULSD prices were assessed at $3.9343 gallon, indicating Gulf Coast values did not keep pace with the strength seen in futures.

The widening discount suggests recent weakness in basis has been driven more by the sharp rally in New York Harbor ULSD futures rather than a sudden deterioration in Gulf Coast physical market conditions

Midwest Gasoline Basis Tumbles on NYMEX Rally

Midwest CBOB differentials tumbled Wednesday (5/6) on pressure from rallying gasoline futures on NYMEX, although the downside was mitigated somewhat by federal data this week indicating a six-month low in regional gasoline stocks.

The CBOB basis in Chicago fell 22cts to stand at a discount of 14cts a gallon to June NYMEX gasoline.

On the Buckeye Storage Complex, the differential for CBOB slid 12cts to rest at 0.5cts discount to the NYMEX benchmark. On the Wolverine pipeline, it lost 18cts to stand at merc levels.

The basis for Group 3 suboctane gasoline, meanwhile, shed 1.5cts to rest at a discount of 11.5cts to June NYMEX gasoline.

The markdowns reversed the higher basis seen last week for Midwest gasoline and came amid inventory data from the U.S. Energy Information Administration (EIA) this week pointing to stockpiles at a near six-month low.

Gasoline balances in the PADD 2 region fell by 600,000 bbl to 45.6 million bbl for the week ended May 8, the EIA reported on Wednesday (5/16). This was below the 48.4 million bbl recorded in the same week of last year and marked the lowest since the week ended Nov. 28, 2025, when inventories stood at 44.9 million bbl.

Baker Hughes: Weekly North America Rig Count Up by 3

North American energy drilling activity increased by three rigs this week, according to Baker Hughes’ weekly rigs report released Friday (5/15). The regional rig count stood at 675 in the week to May 15, compared to 672 in the week prior.

Rigs for Canada and the U.S. combined were also lower than the 697 actively deployed in the same week last year. This week’s rig changes were driven entirely by gains in the United States, which saw an increase of three rigs.

Canada’s count remained unchanged at 124, which is slightly above the 121 seen during the same time last year. The U.S. rig count reached 551, though it remained below the year-ago level of 576.

In the United States, oil rigs alone increased by five to 415. Conversely, the gas rig count fell by one to 128, and miscellaneous rigs dipped by one to eight.

By trajectory, horizontal rigs rose by three to 484, while directional rigs increased by two to 52. Vertical rigs fell by two to 10

EPA Proposes 2-Year Delay of Vehicle Emission Standards

The U.S. Environmental Protection Agency (EPA) is proposing to delay compliance deadlines for Biden-era Tier 4 light- and medium-duty vehicle emission standards by two years, pushing enforcement to model year 2029.

 The action is projected to save more than $1.7 billion, the agency said in a statement late Thursday (5/14).

 The Biden Administration’s 2024 Tier 4 standards estimated  that electric vehicles (EVs) would comprise a significant share of model year 2027 and beyond fleets. Those projections never materialized, leaving internal combustion engine (ICE) manufacturers facing unattainable targets, according to EPA.

However, major automakers have responded to weak EV demand by pulling back investments, EPA stated.  General Motors announced a $4 billion shift toward ICE production and a $6 billion charge to unwind EV commitments, while Ford cancelled electric SUV plans and Stellantis scrapped its plug-in lineup entirely.

 If finalized, manufacturers would continue meeting Tier 3 standards — which already deliver up to 80% emissions reductions — for model years 2027 and 2028 vehicles, before phasing in Tier 4 requirements with model year 2029 fleets.

The proposal is Part 1 of a broader Tier 4 review; Part 2 will reconsider the standards, phase-in schedules, and test procedures.

This action follows the February 2026 repeal of the 2009 Endangerment and the June 2025 Congressional Review Act disapproval of three California vehicle emission waivers. A 45-day public comment period is now open.

Enterprise Reports Flare at Mont Belvieu Propane Unit

Enterprise reported Wednesday (5/13) a 24-hour flaring at the propane dehydrogenation (PDH) unit of its 1.2 million bpd Mont Belvieu Complex facility in Mont Belvieu, Texas, a filing with the Texas Commission on Environmental Quality said.

The event began at 3:00 a.m. CT on Wednesday and is expected to continue through 3:00 a.m. CT Thursday (5/14), the filing said.

According to the details of the event, a safety monitoring system fault triggered the shutdown of the Regen Air Compressor B at the complex’s propane dehydrogenation (PDH) unit, resulting in a flaring activity.

Estimated emissions included approximately 1,000 pounds of carbon monoxide, 500 pounds of nitrogen oxides, 100 pounds each of propane and propylene, and 50 pounds each of ethylene and sulfur dioxide.

The company said operations personnel were working to limit flaring while investigating the cause and implementing corrective actions.

The facility is among the largest natural gas liquids fractionation hubs in North America.

DTN reached out to Enterprise for additional details but did not get an immediate response.

EIA: U. S. Industrial Natural Gas to Set 2026-2027 Record

 U.S. industrial natural gas consumption is expected to reach record levels in 2026 and 2027 as modest manufacturing growth offsets efficiency improvements and supports slightly higher fuel use across the sector, according to the U.S. Energy Information Administration’s May Short-Term Energy Outlook (STEO).

Industrial natural gas demand averaged a record 23.6 Bcf/d in 2025, exceeding the previous annual high of 23.4 Bcf/d set in 2023. EIA forecasts industrial consumption will rise by 1.2%, or 0.3 Bcf/d, in 2026 and by an additional 1.7%, or 0.4 Bcf/d, in 2027.

EIA said growth in industrial natural gas use is expected to remain gradual as efficiency improvements continue reducing fuel requirements per unit of output. Facilities have increasingly adopted more efficient process heaters and heat-recovery technologies, although the agency projects rising industrial activity will more than offset those efficiency improvements over the next two years.

The agency’s natural gas-weighted manufacturing index is forecast to increase 1.5% in 2026 and 0.7% in 2027. Much of U.S. industrial demand comes from the chemicals sector, the largest industrial consumer of natural gas, where the fuel is used for process heat, electricity generation and as feedstock for products including methanol, fertilizer and hydrogen.

Industrial demand also follows a seasonal pattern, typically peaking during winter months. Consumption averaged 26.1 Bcf/d in January 2026 and is forecast to average 26.7 Bcf/d in January 2027. By comparison, EIA expects demand to reach seasonal lows around June, averaging about 22.6 Bcf/d in both 2026 and 2027.

Industrial natural gas use has remained relatively stable since 2018 outside of the pandemic-related decline in 2020 and subsequent recovery. Earlier expansion in petrochemical, ammonia and refining sectors, particularly along the Gulf Coast, raised baseline industrial demand, although EIA noted the pace of new capacity additions has slowed in recent years.

Analysis: Hormuz Jam May Be Tailwind for U.S. Oil Output

U.S. crude oil has over the past two months become the replacement barrel for flows missing on the Persian Gulf’s Strait of Hormuz. The longer the supply disruption lasts, the more likely it is to incentivize U.S. producers to expand operations.

That would be contrary to expectations at the start of the year when most forecasters predicted U.S. oil output to start a decline that could persist over the next few years – despite a history of production growth that often surpassed expectations.

Just six months ago, a sizeable crude oil overhang was predicted, leaving spot prices dangerously close to a break-even range for new well drilling.

This threatened to end the growth trend in U.S. crude production. Output growth slowed over the past few years but stayed positive as efficiency gains more than compensated for the decreasing number of active rigs.

Still, the low price expectations initially pegged for 2026-2027 indicated there might be too few new wells to make up for depleting legacy production.

Back then, we cautioned that “global supply side risks remain abound, and sustained supply outages caused by wars and embargos could catapult prices into a range conducive to continued production growth”.

In a first-quarter survey carried out by the Dallas Federal Reserve, U.S. exploration and production firms polled cited an average needed WTI price of $43 bbl to cover operating expenses for existing wells, ranging from $34 to $47 bbl depending on the region. Average break-even for a new well was penciled in at the $62-$70 bbl range.

Fast forward to this week, the Energy Information Administration (EIA) forecast a 2026 average of $85.33 bbl for West Texas Intermediate (WTI) crude in its Short-Term Energy Outlook (STEO) for May.

The EIA’s April STEO had an even loftier expectation of $87.08 bbl for WTI, which it pared this month on concerns that production by the Organization of Petroleum Exporting Countries and its allies could rise despite the Middle East conflict.

The EIA had steadily raised its oil price expectations in recent months on the assumption that flows through the Strait of Hormuz would return by April and May – a prospect that has already been nullified.

Two months into WTI trading in the $84 to $113 bbl range, with an average far above $90 bbl, U.S. rig counts continued to drop, suggesting that producers in the early days of the Hormuz crisis were not confident of the supply disruption lasting long enough to warrant new investments.

With the crisis looking far from unresolved, and WTI prices staying far above break-even levels for new wells even after Middle East supply is restored, U.S. producers may well opt to expand operations.

PEMEX Deer Park Refinery Reports Flaring Event

PEMEX reported an emissions event at its 312,500 bpd Deer Park Oil Refinery in Deer Park, according to a filing with the Texas Commission on Environmental Quality.

The event occurred between 4:12 p.m. and 5:20 p.m. CT on Tuesday (5/12), the filing said.

During the incident, a high liquid level in a second-stage knockout pot triggered a safety system response that shut down a compressor at the CPU unit, resulting in flaring at the refinery’s North Property Flare and West Property Flare systems.

Sulfur dioxide emissions totaled approximately 3,900 pounds across both flare systems, according to the filing.

The company said operators restarted the compressor as quickly as practicable to minimize flaring.

The refinery primarily produces gasoline, diesel, jet fuel, and marine fuel.

DTN reached out to PEMEX for additional details but did not get an immediate response.