MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for January 2^nd  

Updated at 5:35 PM ET 

HEADLINES:

— USGC Gasoline Basis in 2025 Remain Steady On Year

— CEC: California Diesel Stocks Fall 245,000 Bbl on Week

— CEC: California Gasoline Stocks Climb 139,000 Bbl on Week

— Analysis: USWC Gasoline Market to Face Volatility in 2026

— Baker Hughes: North America Rig Count Down 16 On Week

— Midwest Gasoline Basis Firmer in 2025 on Year

NEWS:

USGC Gasoline Basis in 2025 Remain Steady On Year

U.S. Gulf Coast regular gasoline basis finished 2025 little changed from a year earlier, as ample supplies and strong refinery operations kept prices steady at the nation’s primary fuel hub.

Houston regular gasoline basis averaged a 2.22cts gallon discount versus the front-month RBOB futures contract in 2025, down just 0.8% from 2024, according to DTN data. The flat pricing environment came despite a sharp drop in crude oil costs and a surge in refinery profitability throughout the year.

Refiners along the Gulf Coast benefited from lower feedstock prices, with crude oil benchmarks falling sharply compared to 2024. West Texas Intermediate futures averaged $62.31 bbl; in 2025, while ICE Brent futures averaged $65.83 bbl—both down from approximately $80 bbl recorded the previous year.

The lower crude prices led to a decent expansion in refining margins. In the US Gulf Coast the 3:2:1 crack spread –the price difference between crude oil and its refined products–was $15. 67 bbl as of December 31, according to Energy Administration.

Regional refinery utilization reached an average of 92.30%, up four percentage points from 2024, according to EIA data, reflecting strong demand and optimal operating conditions. Last year, higher runs helped meet domestic fuel demand while supporting robust gasoline and product exports from Gulf Coast facilities. However, for 2026, a global supply glut, and sluggish demand could represent a major challenge for USGC refiners.

CEC: California Diesel Stocks Fall 245,000 Bbl on Week

California diesel inventories declined in the week ending December 26 pressured by draws in Northern California, according to the California Energy Commission’s Weekly Fuels Report released Thursday (1/1).

Statewide CARB diesel and other diesel fuel stocks declined by 245,000 bbl to 2.492 million bbl, up 3% from last year.

Northern California saw the largest movement this week, with total diesel inventories falling by 259,000 bbl to 1.262 million bbl, up 29% annually.

Northern CARB diesel fuel stocks slipped by 195,000 bbl to 911,000 bbl. Northern other diesel fuel stocks fell by 64,000 bbl to 351,000 bbl.

Southern California diesel inventories rose by 14,000 bbl to 1.230 million bbl, but remained 15% below last year.

Southern CARB diesel fuel stocks dropped by 149,000 bbl to 566,000 bbl, while Southern other diesel fuel stocks climbed by 163,000 bbl to 664,000 bbl.

Statewide diesel production fell by 309,000 bbl to 1.403 million bbl, up 5% from last year.

Southern California diesel production fell by 153,000 bbl to 902,000 bbl, a 3% annual increase.

Production for Northern California diesel declined by 156,000 bbl to 501,000 bbl, up 11% from last year.

CEC: California Gasoline Stocks Climb 139,000 Bbl on Week

California gasoline inventories climbed in the week ending December 26, driven by increases in both Northern and Southern California, according to the California Energy Commission’s Weekly Fuels Report released Thursday (01/1).

Statewide gasoline stocks, including CARB reformulated, non-California, and blending components, climbed by 139,000 bbl to 11.475 million bbl, up 19% from last year.

Northern California saw the largest movement this week, with total gasoline inventories rising by 114,000 bbl to 5.454 million bbl, up 25% annually.

Northern CARB reformulated gasoline climbed by 193,000 bbl to 3.100 million bbl. Northern non-California gasoline increased by 54,000 bbl to 336,000 bbl.

Southern California gasoline inventories rose by 24,000 bbl to 6.021 million bbl, up 13% from last year.

Southern CARB reformulated gasoline increased by 12,000 bbl to 2.617 million bbl. Southern non-California gasoline was unchanged at 558,000 bbl.

Statewide gasoline production went up by 118,000 bbl to 5.918 million bbl, down 6% from last year.

Southern California gasoline production increased by 2,000 bbl to 3.699 million bbl, down 17% annually.

Northern California gasoline production climbed by 115,000 bbl to 2.219 million bbl, up 22% from last year.

Analysis: USWC Gasoline Market to Face Volatility in 2026

The U.S. West Coast gasoline market in 2025 was shaped less by collapsing demand and more by a steady erosion of supply flexibility, as refinery closures, recurring outages and heavier reliance on imports kept prices volatile despite softer consumption. While electric vehicle adoption continued to rise, particularly in California, gasoline demand declined more gradually than many earlier forecasts had projected, leaving the region exposed when supply disruptions occurred.
Throughout 2025, national gasoline inventories often appeared balanced. Yet West Coast prices continued to swing sharply in response to refinery outages, import timing and logistical constraints that limited the region’s ability to respond quickly when supply tightened.
U.S. gasoline consumption declined under 8.9 million bpd in 2025, down roughly 1% from 2024, according to Energy Information Administration and DTN data. However, on the West Coast, demand erosion was uneven and did little to relieve prices as refining capacity contracted more quickly than demand.
With fewer refineries operating and limited redundancy, even short-term outages tightened prompt markets and pushed prices higher.
DTN pricing data show Los Angeles CARBOB regular wholesale prices averaged roughly $1.70 to $1.80 per gallon in 2025, down from about $1.95 to $2.00 per gallon in 2024. Despite that year-over-year decline, prices remained elevated by historical standards. During the pandemic year of 2020, CARBOB prices averaged closer to the low $1.00-per-gallon range for much of the year as demand collapsed, refinery utilization fell sharply and global crude markets struggled with oversupply. Traders said the persistence of higher price floors in 2025 underscored how structurally tighter the West Coast gasoline system has become since the pandemic.

Baker Hughes: North America Rig Count Down 16 On Week

North American drilling activity declined by 16 rigs this week, with the entire drop driven by lower activity in Canada, according to Baker Hughes’ weekly rig count report released this week.

The combined change in U.S. and Canadian rig counts left the total North American rig count at 647, down from 663 the prior week. Year-on-year, North American rigs were lower by 36 from the 683 rigs operating during the same week last year, according to the report released on Tuesday (12/30) due to the New Year’s holiday.

Canada’s total rig count fell by 17 week-on-week to 101. By contrast, the U.S. rig count edged higher by one to 546, partially offsetting the broader North American decline.

In the United States, land-based drilling activity increased by one rig to 527 for the week. Offshore activity was unchanged at 16 rigs, while activity in inland waters was flat at three. The Gulf of Mexico rig count was unchanged at nine.

Year-on-year, U.S. rigs were lower by 43 from the 589 reported during the same week last year.

U.S. oil rigs rose by three to 412 for the week. Gas rigs fell by two to 125. The count for miscellaneous U.S. rigs was unchanged at nine.

By drilling type, horizontal rigs rose by two to 476. Directional rigs were unchanged at 56, while vertical rigs slipped by one to 14.

Midwest Gasoline Basis Firmer in 2025 on Year

Midwest gasoline prices strengthened on average in 2025 from a year earlier, as Group 3 sub-octane barrels and Chicago CBOB traded at a narrower discount to the front-month NYMEX RBOB futures contract, despite a late-year price slide amid stable regional inventories.

Chicago CBOB averaged a discount of about 11cts to front-month RBOB in 2025, compared with an average 15cts discount in 2024, based on DTN price data. Group 3 sub-octane gasoline showed a similar pattern, averaging about at a 10cts discount in 2025 versus roughly 15.5cts the prior year. The narrower annual averages reflected a firmer pricing structure for much of 2025, despite periods of volatility and softening towards year-end.

That strength eroded late in the year. On the final trading day of 2025, Chicago CBOB was assessed at a 17cts discount to front-month RBOB, wider than the 8cts discount recorded on December 31, 2024. Group 3 sub-octane was assessed at a 23cts discount at year-end, compared with a 12cts discount at the close of 2024. The widening at year-end pointed the softer seasonal demand and improving supply availability heading into winter.

In a longer-term context, 2025 pricing more closely resembled conditions seen during 2020, when Chicago CBOB averaged about an 11cts discount and Group 3 about 8.5cts, rather than the weaker basis environment that dominated much of 2024. The comparison highlights how 2025 was defined more by balance than by structural oversupply, despite the late-year pullback.

Inventory levels helped shape both the stronger annual averages and the softer year-end tone.  U.S. Energy Information Administration (EIA) data showed PADD 2 gasoline stocks stood at 50.6 million bbl in the week ended December 26, compared with 49.8 million bbl in the same week last year. With inventories ending the year slightly higher than a year earlier, the market lacked a supply-driven catalyst to support spot gasoline prices into year-end, even as overall balances remained relatively stable.