MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 4th

Updated at 5:00 PM ET 

HEADLINES:

— BTS: U.S. Airlines Jet Fuel Consumption Rise by 6.2% in Oct.

— PNW Sub-Octane Regular Basis Falls to 20-Month Low

— CEC: California Diesel Stocks Up 96,000 Bbl on Week

— CEC: California Gasoline Stocks Climb 592K Bbl on Week

— EIA reports 12 Bcf Withdrawal To US NatGas Storage Last Wk

— Analysis: East Coast Enters Winter with Record Low Stocks

NEWS:

BTS: U.S. Airlines Jet Fuel Consumption Rise by 6.2% in Oct.

U.S. scheduled service airlines consumed 6.2% more fuel in October versus September, according to data released Thursday (12/4) by the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).

Jet fuel consumed by U.S. airlines in October totaled 1.608 billion gallons against the 1.514 billion gallons recorded the previous month, BTS said. Consumption rose almost 2% year-on-year when compared with the 1.58 billion gallons used up in October last year.

Total fuel expenditure for the airlines also climbed, to $3.77 billion in October from $3.49 billion in September and from $3.61 billion in the same month of the prior year.

The average of $2.34 gallon the airlines paid for jet fuel in October was 1.7% higher than the $2.30 in September. Year-on-year, the difference was 2.2% higher from the $2.29 paid in the same period of last year.

PNW Sub-Octane Regular Basis Falls to 20-Month Low

The December Pacific Northwest sub-octane regular gasoline basis hit a 20 month-low on Thursday (12/4) driven by lower offers and weak demand.

DTN assessed December PNW sub-octane regular gasoline at 17.5cts discount to January NYMEX RBOB futures contract, based on offers talked at minus 18cts against the same benchmark, which is a drop of 30cts from the previous trading session.

However, confirmation of trades done at those levels was not available at the time of publication.
Market sources attributed the lower offers to demand softness during winter season across the U.S. Pacific Northwest region.

CEC: California Diesel Stocks Up 96,000 Bbl on Week

California diesel inventories rose in the week ending November 28, led by sharp increase in Northern California, according to the California Energy Commission’s Weekly Fuels Report released Thursday (12/4).

Statewide diesel stocks, including CARB and other grades, climbed by 96,000 bbl to total 2.517 million bbl, while remaining down by 2.5% year over year.

Northern California saw the largest movement for the week, with diesel inventories rising by 279,000 bbl to 1.381 million bbl. Total Northern diesel stocks were up by 31% from last year.

Northern CARB diesel stocks rose by 305,000 bbl to 980,000 bbl, while Northern another diesel fell by 26,000 bbl to 401,000 bbl.

Southern California diesel inventories slid by 183,000 bbl to 1.136 million bbl, and were down by 25% from last year. Southern CARB diesel stocks tumbled by 199,000 bbl to 498,000 bbl, while Southern another diesel slipped by 16,000 bbl to 638,000 bbl.

On the production front, statewide diesel production rose by 79,000 bbl to total 1.347 million bbl, while remaining down by 24% from last year.

Southern California diesel led output this week, with production falling by 26,000 bbl to 842,000 bbl. Year-on-year though, output in the south remained down by 24%.

Southern CARB diesel output fell by 137,000 bbl to 406,000 bbl, while production of another Southern diesel slipped by 111,000 bbl to 436,000 bbl.

Northern California diesel production slipped by 53,000 bbl to 505,000 bbl, down by 25% from the previous year. Northern CARB diesel output rose by 88,000 bbl to 451,000 bbl, while Northern another diesel tumbled by 141,000 bbl to 54,000 bbl.

CEC: California Gasoline Stocks Climb 592K Bbl on Week

California gasoline inventories climbed in the week ending November 28, driven by increases in both Northern and Southern California, according to the California Energy Commission’s Weekly Fuels Report released Thursday (12/4).

Statewide gasoline stocks, including CARB reformulated, non-California, and blending components, climbed by 592,000 bbl to 10.535 million bbl last week, an 8% increase from last year.

Northern California saw the largest movement this week, with total gasoline inventories climbing by 455,000 bbl to 4.893 million bbl, up 17% annually.

Northern CARB gasoline edged up by 190,000 bbl to 2.858 million bbl. Northern non-California gasoline rose by 215,000 bbl to 468,000 bbl. Northern blending components climbed by 50,000 bbl to 1.567 million bbl.

Southern California gasoline inventories rose by 138,000 bbl to 5.643 million bbl week-over-week, up 1% compared with the same week of last year.

Southern CARB gasoline increased by 198,000 bbl to 2.704 million bbl. Southern non-California gasoline fell by 36,000 bbl to 493,000 bbl. Southern blending components dropped by 24,000 bbl to 2.446 million bbl last week.

Statewide gasoline production climbed by 1.050 million bbl to 6.394 million bbl in the profiled week, but fell 3% from the previous year.

Southern California gasoline production rose by 563,000 bbl to 4.139 million bbl week over week, up 13% on annual basis.

Southern CARB gasoline production jumped by 95,000 bbl to 3.248 million bbl, while Southern non-California gasoline production rose by 468,000 bbl to 891,000 bbl.

Northern California gasoline production increased by 486,000 bbl to 2.255 million bbl last week, 23% down from the same period of last year.

Northern CARB production increased by 288,000 bbl to 1.989 million bbl in the week ended November 28, with Northern non-California gasoline production also rising by 198,000 bbl to 266,000 bbl during the same period.

EIA reports 12 Bcf Withdrawal To US NatGas Storage Last Wk

Energy Information Administration data released midmorning Thursday (12/4) show a 12 billion cubic feet withdrawal from U.S. natural gas storage to 3.923 trillion cubic feet in the week ended November 28.

Natural gas in U.S. storage is 0.5% lower than last year and 5.1% above the five-year average of 3.732 Tcf.

Regionally, EIA reports the East registered a 4 Bcf withdrawal to 888 Bcf, 3.1% less than a year ago and in line with the five-year average.

Natural gas in storage in the Midwest decreased 15 Bcf week-on-week to 1088 Bcf, a 2.7% deficit compared to the same week a year ago and 0.7% higher than the five-year average.

Mountain region natural gas in storage decreased 4 Bcf, down 0.3% year-on-year to 22% above the five-year average.

Analysis: East Coast Enters Winter with Record Low Stocks

The U.S. is entering winter with historically low distillate fuel oil inventories. Stocks on the East Coast, where heating oil remains an important heating source in the winter months, are particularly depleted.

According to U.S. Energy Information Administration data, nationwide distillate fuel oil stocks, a category which includes diesel and heating oils, ended November at 114.3 million bbl, down 3.2% year-on-year. Despite the builds in recent weeks, stocks remained near the low end of the historical range, trailing the five-year average by 8.8%.

In PADD 1 – or the U.S. East Coast, which ranks as the largest consuming region for petroleum-based heating fuels – inventories of distillate fuel oil were even lower by historical standards. According to EIA data, PADD 1 stocks of diesel and heating oil were at 28.8 million bbl in the week ending November 28, down 17.6% year-on-year and 26.7% below the five-year seasonal average.

U.S. distillate fuel oil inventories hovered near the low-end of historical ranges in the first half of the year as the prospect of tariffs and winter weather in the first quarter boosted diesel demand. This tightness eased in the third quarter, as stocks were being rebuilt much faster than in years prior, expanding by 20.78 million bbl in three months, narrowing the gap to the five-year average from 24% back into the single digits and found themselves in line with the three-year average in the last week of November. Commercial diesel and heating oil inventories on the East Coast, in contrast, are still 5.4% lower than the 3-year average.

Ultra-low sulfur diesel fuel, which makes up the lion’s share of distillate fuel oil, may muddy the water when it comes to assessing heating oil inventories. High-sulfur fuel oil stocks on the East Coast, for instance, are at their lowest in decades, a third less than at the same time last year and at only a quarter of the five-year average.

In the first quarter of this year, the East Coast experienced normal temperatures after two back-to-back unusually warm winter seasons, leading to a 4.5% year-on-year increase in distillate fuel oil demand. While weather forecasts imply similar heating demand this winter, the EIA expects 4% less fuel oil demand in this heating season given the switching by more households to other heating sources.

Overall domestic distillate fuel oil demand is likely to stay close to year-ago levels in the first quarter of next year as retail spending continues to surprise to the upside, boosting freight demand in the face of contracting industrial activity. At the same time, U.S. refiners are shutting operations just as the global diesel market is much tighter than typical for this time of year, implying little relief in sight for low inventories.

South Central storage rose 16 Bcf to 1345 Bcf, 2.8% more than in the same week last year and 7.8% above the five-year average.