MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 11th

Updated at 5:00 PM ET 

HEADLINES:

— USGC CBOB Basis Hit 5-Year Low on Stocks Build

— GVR Unveils Ultra-Fast 400kW EV Charger

— CEC: California Gasoline Stocks Climb 297,000 Bbl on Week

— CEC: California Diesel Stocks Up 151,000 Bbl on Week

— OPEC+ Stays Bullish as Output Rises

— EIA reports 177 Bcf Withdrawal From US NatGas Storage

— PNW ULSD Basis Plummets on Lower Offers

— EIA: U.S. Crude Stocks to Rise More Than Expected in 2026

— IEA Lowers 2026 Oil Surplus Forecast to 3.84M Bpd

NEWS:

USGC CBOB Basis Hit 5-Year Low on Stocks Build

Basis for January CBOB regular gasoline at the Houston origination point for the Colonial Pipeline in the Gulf Coast spot market hit a 5-year low on Thursday, driven by plentiful supplies and weak demand.

CBOB gasoline regular basis in the USGC weakened by 500 points to a 13.75cts discount to January RBOB futures on the New York Mercantile Exchange, the weakest level since December 2020, and down by 13% compared with the same period of last year, according to DTN data.

The weakening basis follows Energy Information Administration data showing USGC (PADD 3) motor gasoline blending component stocks rising for the second consecutive week to 80.1 million bbl in the week ended December. This was higher by 1.1 million bbl than the volume reported the prior week and up by 4.3 million bbl compared to last year levels.

The combination of robust inventory builds, rising imports, and regional price discounts underscores fundamentally weak demand in the main U.S. fuel hub.

Due to abundant supply and weak demand fundamentals, the USGC also continued reporting the lowest U.S. gasoline retail price in the week ended December 8, as it was at $2.493 gallon, 44.7cts below the $2.9400 gallon national average price, EIA data showed.

GVR Unveils Ultra-Fast 400kW EV Charger

Gilbarco Veeder-Root announced Thursday (12/11) the launch of an ultra-fast charging platform aimed at making the charging of electric vehicles (EV) as convenient as filling up at gas pumps.

The Konect 400 kW All-in-One EV Charger integrates 400 kW charging capability with a single, consistent payment and software management solution, similar to the customer experience found at a traditional fuel pump, GVR said in a statement.

The company is guaranteeing a 98% uptime target for the unit, which it said was essential for increasing driver confidence and encouraging broader EV adoption.

Widely available high power charging infrastructure has become critical in influencing fleet operators to go electric in fast growing EV markets such as Georgia in the Southeast and Mountain West in Colorado.

CEC: California Gasoline Stocks Climb 297,000 Bbl on Week

California gasoline inventories climbed in the week ending December 5, driven by increases in Southern California, according to the California Energy Commission’s Weekly Fuels Report released Thursday (12/11).

Statewide gasoline stocks, including CARB reformulated, non-California, and blending components, climbed by 297,000 bbl to 10.832 million bbl, up from the prior week and 4% above last year.

Northern California saw a slight decline this week, with total gasoline inventories falling by 61,000 bbl to 4.832 million bbl, though still 3% higher than the previous year.

Northern CARB gasoline plunged by 448,000 bbl to 2.41 million bbl, while Northern non-California gasoline dropped by 86,000 bbl to 382,000 bbl. Northern blending components climbed by 473,000 bbl to 2.040 million bbl.

Southern California gasoline inventories rose by 357,000 bbl to 6 million bbl, up 4% from the year prior.

Southern CARB gasoline rose by 85,000 bbl to 2.789 million bbl. Southern non-California gasoline also climbed by 85,000 bbl to 578,000 bbl, and Southern blending components increased by 187,000 bbl to 2.633 million bbl.

On the production side, statewide gasoline production fell by 220,000 bbl to 6.174 million bbl, but remained 2% above last year.

Southern California gasoline production increased by 84,000 bbl to 4.223 million bbl, up 11% annually.

Southern CARB gasoline production eased by 25,000 bbl to 3.223 million bbl, while Southern non-California gasoline production climbed by 109,000 bbl to 1 million bbl.

Northern California gasoline production fell by 304,000 bbl to 1.951 million bbl, down 13% from last year.

Northern CARB production slipped by 107,000 bbl to 1.882 million bbl, with Northern non-California production declining by 197,000 to 69,000 bbl.

CEC: California Diesel Stocks Up 151,000 Bbl on Week

California diesel inventories rose in the week ending December 5, 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 151,000 bbl to total 2.668 million bbl, while remaining down by 10% year over year.

Northern California saw the largest movement for the week, with diesel inventories rising by 98,000 bbl to 1.489 million bbl. Total Northern diesel stocks were up by 18% from last year.

Northern CARB diesel stocks rose by 96,000 bbl to 1.076 million bbl, while Northern other diesel climbed by 2,000 bbl to 403,000 bbl.

Total southern California diesel inventories climbed by 53,000 bbl to 1.189 million bbl, and were down by 31% from last year.

Southern CARB diesel rose by 27,000 bbl to 525,000 bbl. Southern other diesel climbed by 26,000 bbl to 664,000 bbl.

On the production front, statewide diesel production increased by 266,000 bbl to total 1.613 million bbl, and higher by 1.6% from last year.

Southern California diesel led output this week, with production rising by 201,000 bbl to 1.043 million bbl. Year-on-year though, output in the south was down by 1%.

Southern CARB diesel output rose by 133,000 bbl to 539,000 bbl, while production of Southern other diesel increased by 68,000 bbl to 504,000 bbl.

Northern California diesel production advanced by 65,000 bbl to 570,000 bbl, down by 7% from the previous year. Northern CARB diesel output rose by 83,000 bbl to 534,000 bbl, while Northern other diesel tumbled by 18,000 bbl to 36,000 bbl.

Analysis: U.S. Refiners Bet on Diesel’s Relative Strength

U.S. refining margins soared to multi-year highs last month, driven by the strength in middle distillates. Low inventories and a global refining rut have provided price support to the middle of the barrel in the second half of the year. In October, a new sanctions announcement kick-started a rally in diesel futures, with NYMEX-traded ULSD futures peaking at a five-month high in mid-November.

Diesel futures on both sides of the Atlantic have been much more resilient to slowing demand growth than gasoline prices. Middle distillate supply, already limited by sanctions and import embargos, further tightened in the second half of the year as global refinery outages soared. U.S. inventories of distillate fuel oil consequently remained far below historical norms throughout the year.

Continental Europe, cut off from one of its main diesel supply streams since the European Union imposed an import embargo on Russian refined fuels in February 2023, has similarly experienced low inventory levels. Shrinking refining capacity and higher prices for alternatives to Russian fuels further kept a ceiling on inventories.

Gasoline Narrative In the Opposite

The lighter side of the barrel, in contrast, experienced no supply woes of this magnitude and offers a bearish narrative for gasoline, both in the U.S. and Europe.

Because the average density of crude oil running through U.S. refineries is getting lighter each year, it is yielding more top-of-the-barrel product like gasoline versus medium-and-heavy derivatives that include diesel.

While much of the U.S. runs on gasoline, Europe’s fleet has a mixed dependency that requires relatively more diesel. To meet its diesel demand, Europe is also producing more gasoline than it needs, as a by-product of getting to that diesel. The excess European gasoline used to be exported, mostly to West Africa. But since last year, the 650,000-bpd Dangote refinery in Nigeria has been producing a substantial part of fuels needed by West Africa, weaning the region off imports and forcing Europe to find other markets for its excess gasoline.

In the U.S., gasoline inventories have stayed within historical bounds – in contrast to distillate fuel oil stocks – pressuring RBOB futures to trade below year-ago levels for most of 2025.

Demand developments, meanwhile, were also less supportive of gasoline than middle-of-the-barrel product. Auto fleet rejuvenation, engine efficiency gains and the growing share of electric vehicles have cut into petroleum fuel demand, particularly for gasoline.

Diesel Strength vs Gasoline to Continue

While U.S. vehicle miles traveled surpassed the pre-COVID peak for the first time this year, the U.S. Energy Information Administration observed no commensurate growth in gasoline supplied to the domestic market – a proxy measure for consumer demand.

The relative strength of diesel vis-a-vis gasoline is likely to persist, as is the growing divergence between refined product and crude oil prices. The EIA in its latest short-term energy forecast expects crack spreads to remain above the already high levels observed this year, driven by diesel, fuel oil and jet fuel. While diesel and gasoline inventories alike are forecast to stay low by historical standards, the agency’s price development forecasts still differ by fuel type.

EIA expects wholesale gasoline prices to average $1.85 gallon in the first quarter of 2026, down 8.4% quarter-on-quarter and 15.9% year-on-year. Wholesale diesel, meanwhile, is forecast to average $2.17 gallon, down 7.6% quarter-on-quarter and 9.6% year-on-year.

Planned refinery closures on both sides of the Atlantic and a looming EU import embargo for refined products made from Russian crude oil should continue to provide support to product prices, favoring the middle of the barrel. Given ample crude oil supply and limited spare refining capacity, the divergence between oil and product prices is also set to continue well into 2026.

OPEC+ Stays Bullish as Output Rises

The Organization of the Petroleum Exporting Countries and its partners kept demand growth forecast for 2026 unchanged at 1.38 million bpd in their latest monthly oil report published Thursday (12/11). The group’s oil output edged higher last month, but continued to be plagued by outages.

Combined crude oil production by OPEC+ – the alliance of 12 OPEC countries and 10 partners – rose by less than expected in November. Eight key nations in the alliance agreed to a 137,000 bpd production increase in November, but put out an additional 126,000 bpd instead. Output declines from others in OPEC+ offset much of that surplus, effectively curtailing supply growth to 43,000 bpd.

Modest increases in Saudi oil production and an uptick in Kazakh output were also largely offset by declines elsewhere.

Output from members of the Declaration of Cooperation, the OPEC+ group excluding Libya, Venezuela and Iran, rose by 85,000 bpd month-on-month. But supply outages which led to a surprising drop in production in October continued to weigh on the group’s output. Sanctions on Russia and heavy maintenance at Kazakh oil fields kept output constrained.

Optimistic demand growth expectations – some 500,000 bpd higher than forecast by the International Energy Agency – coupled with a relatively modest non-OPEC output growth forecast, implies a well-balanced crude oil market in 2026, OPEC’s final analysis shows.

That puts the group at odds with most major forecasting agencies and analysts who are expecting a sizable crude overhang next year.

EIA reports 177 Bcf Withdrawal From US NatGas Storage

VIENNA (DTN) – Energy Information Administration data released midmorning Thursday (12/11) show a 177 billion cubic feet withdrawal from U.S. natural gas storage to 3.746 trillion cubic feet in the week ended December 5.

Natural gas in U.S. storage is 0.7% lower than last year and 2.8% above the five-year average of 3.643 Tcf.

Regionally, EIA reports the East registered a 45 Bcf withdrawal to 843 Bcf, 2.4% less than a year ago and 2.1% lower than the five-year average.

Natural gas in storage in the Midwest decreased 58 Bcf week-on-week to 1030 Bcf, a 3.2% deficit compared to the same week a year ago and 1.8% lower than the five-year average.

Mountain region natural gas in storage decreased 11 Bcf, down 2.1% year-on-year to 20.4% above the five-year average.

South Central storage fell 55 Bcf to 1290 Bcf, 2.5% more than in the same week last year and 5.1% above the five-year average.

PNW ULSD Basis Plummets on Lower Offers

Pacific Northwest ULSD basis plunged on Thursday (12/11), slipping by 6.5cts to a 14cts discount to the January NYMEX ULSD futures contract after lower offers were heard in the spot market.

Market sources said an offer for PNW ULSD was heard at a 13.5cts discount, but a trade at that level was not confirmed at the time of publication.

The sharp decline follows a recent stretch of relative stability. The average spot price has been at 44.50cts premium since summer before sinking to 1.50cts on November 6 at its lowest level of the year to rebound up to a 10.50cts premium on Friday (11/14).

“ULSD bids had firmed earlier this month on expectations of winter heating support and intermittent refinery maintenance,” one trader said.

Typically, Pacific Northwest ULSD prices remain steady for extended periods, reflecting balanced supply and demand fundamentals, making Thursday’s sharp decline noteworthy.

EIA: U.S. Crude Stocks to Rise More Than Expected in 2026

The U.S. Energy Information Administration expects commercial crude oil inventories to expand faster than expected next year. In its short-term energy outlook for December, published Tuesday (12/9), EIA estimates stocks to reach 482.3 million bbl by the end of next year, marking a 5.9% upward revision from November’s report. That implies a 12% growth rate for domestic crude oil inventories next year.

Commercial crude stocks were lagging year-ago levels for most of 2025, but have recently caught up and are forecasted to end the year at 430.4 million bbl, up 4.1% year-on-year. The agency expects crude oil stockpiles to swell to 484.9 million bbl by the end of the first quarter of 2026. This 3.9% upward revision from its previous estimate leads to an implied average stock build of more than 600,000 bpd over the first three months of next year.

This came despite the agency trimming U.S. production expectations. EIA forecasts slightly lower production next year than in 2025, as drops in inland output from the lower 48 are set to outweigh growth in Alaskan and offshore production by some 80,000 bpd.

On the flip side, planned refinery closures and easing crack spreads suggest lower crude oil input rates moving forward. EIA’s Short Term Energy Outlook for December estimated net inputs into refineries to lag year-ago levels over the first nine months of the year, by close to 300,000 bpd on average.

U.S. inventories are likely to absorb some of the global overhang expected for next year. EIA forecasts net imports of crude oil in the first quarter of 2026 to rise year-on-year, bucking a decade-long trend. Lackluster international demand from an oversaturated market would see the drop in exports outpace the decline in imports.

Backwardation in the spreads of West Texas Intermediate futures on NYMEX has eased markedly in view of oversupply expectations. WTI’s forward curve is relatively flat throughout 2026, a stark departure from the steep backwardation seen for most of this year, removing an important incentive to keep storage levels low.

IEA Lowers 2026 Oil Surplus Forecast to 3.84M Bpd

The International Energy Agency in its latest monthly oil report published Thursday (12/11) revised downward its oil surplus forecast for next year on an improved macroeconomic outlook and biting sanctions on Russian and Venezuelan oil. The Paris-based energy watchdog still expects global oil supply to far exceed demand next year.

IEA once again lifted its global demand growth forecast amid easing trade tensions and improved economic conditions. The agency pegs global oil demand growth at 830,000 bpd this year and forecasts 860,000 bpd for 2026, saying it expects petrochemical feedstocks to be the main driver.

Global supply fell for a second month in a row, spearheaded by sanctions-hit lower Russian supplies. That led IEA to cut oil supply growth estimates for this year and next by 100,000 bpd and 20,000 bpd, respectively. Together with higher growth expectations, these revisions lowered the prognosticated oil-overhang next year to 3.84 million bpd, down from 4.09 million bpd in the November IEA report.

Prolonged unplanned production outages in Kuwait and Kazakhstan and dwindling output of sanctioned Russian and Venezuelan oil also led the agency to cut surplus expectations for the fourth quarter of this year.

Still, global observed inventories in October expanded the ninth consecutive month to a four-year high, and preliminary data suggested the same was true last month. Stock builds averaged 1.4 million bpd in October, and 1.2 million bpd in the first ten months of the year.

Refinery outages and a looming EU import embargo for refined products made from Russian crude oil led refining margins to a 3-year high last month. Given ample crude oil supply and limited spare refining capacity outside of China, the IEA expects this divergence between oil and product prices to continue well into 2026.