MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 22nd

Updated at 5:00 PM ET 

HEADLINES:

— Western Gateway Pipeline Moves Toward LA Market Access

— Trump Admin. Pauses 5 U.S. Wind Projects, Cites “Security”

— Analysis: Jet Fuel Demand Set to Rise, But Faces Headwinds

NEWS:

Western Gateway Pipeline Moves Toward LA Market Access

Phillips 66 and Kinder Morgan Inc. have closed an initial open season for transportation service on the proposed Western Gateway Pipeline after drawing strong shipper interest, a development that could provide an additional pathway for refined products into the U.S. West Coast market.

The companies said commitments received during the first open season supported advancement of the project, prompting plans to launch a second open season in January 2026 for remaining capacity. The next phase is expected to include new delivery options in Southern California through a joint tariff arrangement designed to allow access to Los Angeles-area markets.

Under the proposal, Western Gateway would combine a new pipeline linking Borger, Texas, to Phoenix, Arizona, with Kinder Morgan’s existing SFPP system between Phoenix and Colton, California. Portions of the SFPP line would be reversed to enable east to west flows, allowing refined products to move into California rather than out of the state.

Supplies feeding the system would originate from Midcontinent refinery hubs connected to Borger as well as existing supply points tied to the SFPP network in El Paso, Texas.

Phillips 66 also plans to reverse its Gold Pipeline, which currently runs from Borger to St. Louis, to redirect refined products toward Borger for shipment on the Western Gateway system.

If completed, the project would connect Midwest and Midcontinent refinery supply to demand centers in Arizona and California, with additional connectivity to Las Vegas, Nevada, via Kinder Morgan’s CALNEV Pipeline.

From a West Coast trading perspective, the proposal could add flexibility but may not fundamentally alter the region’s tight supply structure.

“Any new route into Southern California helps, especially during refinery outages, but it doesn’t suddenly fix the lack of redundancy on the West Coast,” one U.S. West Coast refined products trader said. “California specs, timing and logistics still limit how much supply can realistically move into the LA basin, so it’s more of a pressure valve than a game changer.”

The companies have not announced a final investment decision or an in service date, noting that additional shipper commitments from the upcoming open season, along with regulatory and commercial considerations, will determine the project’s scope and timing.

Trump Admin. Pauses 5 U.S. Wind Projects, Cites “Security”

The Trump administration announced on Monday (12/22) that leases for all large-scale U.S. offshore wind projects now under construction will be paused immediately for “security” reasons – a decision that impacts at least five such projects.

 “Today’s action addresses emerging national security risks, including the rapid evolution of the relevant adversary technologies, and the vulnerabilities created by large-scale offshore wind projects with proximity near our east coast population centers,” Doug Burgum, secretary of the interior in President Donald Trump’s cabinet, said in a statement.

Under his fossil fuels-focused agenda, President Trump has dismantled renewable energy infrastructure such as wind and solar through moratoriums and funding cuts, often enforced through national emergency declarations and deregulatory orders.

The statement issued by Burgum said unclassified U.S. government reports had long found that the movement of massive turbine blades and highly reflective towers create a radar interference identified as “clutter.”

The security risk of clutter from offshore wind projects is that they obscure legitimate moving targets and generate false targets in their vicinity, the statement said, adding that all large-scale U.S. offshore wind projects had been identified by the Department of War as national security risk.

The suspension of the projects will give the departments of interior and war, along with other relevant government agencies, time to work with leaseholders and state partners to assess the possibility of mitigating the security risks posed by the projects, the statement said.

The five wind projects impacted by Monday’s order were Vineyard Wind 1, which will serve Massachusetts; Revolution Wind (Rhode Island and Connecticut); CVOW (Virginia); Sunrise Wind (New York) and Empire Wind 1 (New York).

Dominion Energy, operator of the 2,600 megawatts CVOW project, said wind energy was essential in itself for American national security and to meeting Virginia’s energy needs.

“Stopping CVOW for any length of time will threaten grid reliability for some of the nation’s most important war fighting, AI, and civilian assets. It will also lead to energy inflation and threaten thousands of jobs,” Dominion Energy said in a statement.

Analysis: Jet Fuel Demand Set to Rise, But Faces Headwinds

U.S. jet fuel demand in 2025 grew at a rate similar to last year’s as passenger air travel continued to set new records. This year, jet fuel supplied to the domestic market ran slightly ahead of the post-COVID highs set in 2024. Growth, however, was constrained by pilot and air traffic control shortages cutting into the number of operational flights.

Fuel demand is set to rise in 2026 as it faces an uphill battle against a shrinking domestic flight segment and persistent operational constraints. A slowdown in the fleet rejuvenation rate – supply chain delays have kept older, less fuel-efficient aircraft flying longer – is set to provide some tailwind to jet fuel demand. Sustainable aviation fuel (SAF), while slowly growing in market share, still accounts for less than 1% of jet fuel consumption.

Jet fuel supplied, a proxy for demand, averaged 1.727 million bpd in the first nine months of 2025, up 2.3% year-on-year, according to U.S. Energy Information Administration (EIA) data. During peak demand season between May and early September, consumption of kerosene type jet fuel even surpassed 2019 levels for the first time since the pandemic induced collapse of the market in 2020, the same data showed.

In their market outlook published last week, the International Air Transport Association (IATA) forecast global passenger numbers to grow by 4.4% year-on-year in 2026. IATA cited several hurdles for the North American air travel market. Ongoing operational constraints including pilot and air traffic controller shortages are set to limit capacity growth in the U.S. next year to 1%, the lowest rate globally.

 EIA, meanwhile, projected only a marginal uptick in domestic jet fuel demand in 2026. In their latest short-term energy outlook, the agency estimated consumption next year to outpace 2025 levels by 0.6%. Still, jet fuel demand remains the fastest growing among petroleum fuels in a market facing competition from alternative fuel sources and slowing economic growth.

Jet fuel inventories are well-supplied near historical highs ahead of 2026. 

Jet fuel prices, meanwhile, are bound to stay relatively low and will continue to be pressured by softening crude oil prices. EIA expects an average wholesale price of $2 gallon in 2026, down 8.7% year-on-year. The WTI spot price is forecast to decline by more than 21% next year to an average of $51.42 bbl, according to the EIA.

Waning refining capacity should provide some support to jet fuel prices – EIA forecast a nearly 5%-drop in domestic jet fuel production, but the effect from the surplus-induced fall in crude oil prices is likely to outweigh the effect of the supply loss.