MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for January 23rd:

Updated at 5:00 PM ET 

HEADLINES:

— LA Jet Fuel Basis Rises 15cts After Brief Lull

— Houston Jet Fuel Basis Strengthens on Lower Output

— Group 3 Jet Fuel Basis Rises 10cts, Hits a Two-Month High

— CFTC: WTI Leads Energy Short Covering in Week to Jan. 20

— California Sues Trump Administration Over Oil Pipeline

— Vortexa: January Clean Product Exports Jump 5% Y-or-Y

— Baker Hughes: North America Rig Count Up by 6 on Week

— EIA: Storm Fern Could Boost NatGas Demand, Price Concerns

— API: Congress Needs to Act Swiftly on E15 Uncertainty

— Analysis: Risks of U.S. Drilling Rut Rise as Prices Slide

— DoE Targets 35 GW of Backup Power to Blunt Storm Fern

— Analysis: U.S. Refining Rates Ease, Still At 5-Yr High, EIA says

NEWS:

Houston Jet Fuel Basis Strengthens on Lower Output

Basis for jet fuel at the Houston origin of the Colonial Pipeline in the Gulf Coast spot market rose 2.75cts to a 20.50cts discount to March ULSD futures on the New York Mercantile Exchange on Friday (1/23), amid limited supplies caused by lower production.   

The basis of jet fuel in the USGC market was heard trading on the day at minus 17.75cts against the front-month ULSD contract.

PADD 3 jet fuel inventories reported a weekly drop of 1.2 million bbl to 13.5 million bbl for the week ended January 16, according to Energy Information Administration data released on Thursday (1/22). This was 300,000 bbl lower than the volume reported in the same week from the previous year. Jet fuel output averaged 961,000 bpd in the reference week, down 56,000 bpd year-over-year.

LA Jet Fuel Basis Rises 15cts After Brief Lull

Los Angeles jet fuel basis firmed on Friday (1/23), rebounding from the flat levels of the prior day, though values remained well below the multi-year highs from earlier this month amid muted demand conditions.
Los Angeles prompt jet fuel was at a 15cts premium to March NYMEX futures on Friday (1/23) afternoon, reflecting buying interest late in the week. The same upside applied when compared with Thursday (1/22), when basis differences were flat.

Despite the late week uptick, basis levels have softened considerably from the early-January rally that pushed Los Angeles jet fuel to multi-year highs. Market participants said the pullback reflects seasonally weaker consumption, even as underlying supply conditions remain tight.
Jet fuel inventories on the West Coast were unchanged at 11.2 million bbl in the reference week and stood 1 million bbl below last year.

Imports into PADD 5 fell by 77,000 bpd to 102,000 bpd in the week ending January 16, traders noted, helping to keep regional balances constrained despite subdued demand.

Group 3 Jet Fuel Basis Rises 10cts, Hits a Two-Month High

Basis for Group 3 jet fuel soared on Friday (1/23), based on a trade, reaching a two-month high.

Jet fuel strengthened on the day after a trade was confirmed done at 10 cts to a 10cts discount to March NYMEX ULSD futures, the strongest level since November 26, 2025, when it was at 8cts discount to the front-month ULSD futures contract.

“This big move was due to Valero, which was a strong buyer today, actively purchasing barrels amid a shortage of sellers,” a source familiar with the market said.

The uptick in Group 3 jet fuel basis was not reflected across the broader Midwest, as Chicago jet fuel values held steady at a 32cts discount to March NYMEX ULSD futures, signaling that the strength remained localized rather than regional.

Jet fuel inventories in the Midwest (PADD 2) rose by 200,000 bbl to 7.7 million bbl for the week ended January 16, above the 7.5 million bbl reported during the same week last year, according to Energy Information Administration data released Thursday (1/22).

CFTC: WTI Leads Energy Short Covering in Week to Jan. 20

Speculators reduced bearish exposure across much of the NYMEX energy complex during the week ended January 20, led by aggressive short covering in crude oil and distillates, while positioning in gasoline and natural gas moved in more divergent directions, according to the Commodity Futures Trading Commission’s Commitment of Traders report released Friday (1/23).

In NYMEX West Texas Intermediate crude oil futures, noncommercial long positions edged down by 1,327 contracts to 284,809, while short positions fell sharply by 21,991 contracts to 206,017. The moves widened the noncommercial net long position by 20,664 contracts to 78,792, reflecting substantial short covering during the reporting week.

Open interest declined by 54,430 contracts to 1,964,359, suggesting the increase in net length was driven primarily by traders exiting bearish positions rather than new long accumulation, CFTC data shows.

In NYMEX RBOB gasoline futures, noncommercial long positions rose modestly by 305 contracts to 109,470, while short positions increased by 2,052 contracts to 38,690. As a result, the noncommercial net long position narrowed by 1,747 contracts to 70,780, as new short positioning outpaced gains on the long side.

Open interest increased by 5,901 contracts to 456,118, pointing to renewed speculative participation even as sentiment softened relative to other energy contracts.

In NYMEX ULSD futures, noncommercial long positions slipped by 418 contracts to 62,563, while short positions declined by 1,951 contracts to 46,519. The changes lifted the noncommercial net long position by 1,533 contracts to 16,044, supported by short covering amid expanding participation. Open interest climbed by 27,423 contracts to 395,075 during the reporting week, indicating improving engagement alongside a more constructive speculative tone.

In NYMEX natural gas futures, noncommercial long positions dropped sharply by 29,132 contracts to 241,131, while short positions fell by 21,243 contracts to 434,621. The moves narrowed the noncommercial net short position by 7,889 contracts to 193,490, as traders on both sides reduced exposure. Open interest decreased by 21,195 contracts to 1,614,025, reflecting continued position liquidation amid volatile price action and lingering bearish sentiment.

Overall, the CFTC data show speculative positioning turning less bearish across parts of the energy complex, led by crude oil and distillates, while gasoline and natural gas positioning reflected more mixed conviction as traders continued to adjust risk exposure.

California Sues Trump Administration Over Oil Pipeline

California has filed a lawsuit to stop the Trump administration from taking control of two onshore oil pipelines, State Attorney General Rob Bonta’s office announced Friday (1/23).

The legal challenge claims the federal government illegally reclassified the Las Flores pipelines as interstate to bypass strict state safety laws and environmental protections.

By federalizing the lines, federal officials approved a restart plan for oil transporter Sable Offshore Corp. despite the pipelines being shut down since the 2015 Refugio Beach oil spill, Bonta’s office said.

The Trump administration also endangers the California coastline by removing state oversight from the State Fire Marshal, Bonta added.

Vortexa: January Clean Product Exports Jump 5% Y-or-Y

HOUSTON, TX (DTN) – Global seaborne exports of gasoline, diesel, jet fuel and naphtha have surged approximately 5% above 2025 levels in early January, adding 600,000-700,000 bpd to international flows as refiners navigate shifting trade patterns and oversupply pressures, energy and freight intelligence service Vortexa said Friday (1/23).
–    Diesel dominates export growth. Diesel is leading the export surge as Russia aggressively pushes sanctioned barrels into alternative markets following the European Union (EU) ban on Russian-refined products.  Meanwhile, European refiners are ramping up domestic diesel production to replace Russian imports, contributing to a global redistribution of supply rather than reflecting strong end-user demand.
–    Naphtha sees short-term boost. Naphtha exports have strengthened following President Trump’s announcement of a 30-50 million bbl Venezuelan oil purchase. The heavy Venezuelan crude requires naphtha as a diluent for transportation, temporarily boosting demand. However, analysts warn naphtha could become the “swing struggler” as Chinese buying appetite weakens following the Lunar New Year holidays.
–    Gasoline holds steady amid supply disruptions. Gasoline flows have remained stable, supported by steady demand in the U.S. Atlantic Coast and Northwest Europe. The EU ban on Russian products and operational issues at Nigeria’s massive Dangote refinery have helped absorb available supply and maintain balanced markets.
–    Jet fuel margins stay healthy. Jet fuel continues to post robust margins despite constrained global production capacity. Top exporters including South Korea, Kuwait, India and China are operating near maximum output, with limited room to expand supply even as aviation demand remains firm.

Vortexa analysts note that summer demand patterns will be critical in determining whether 2026’s strong start sustains above five-year averages or softens as seasonal factors and market fundamentals reassert themselves.

Editor’s note: This story was written using AI with Vortexa’s information.

Baker Hughes: North America Rig Count Up by 6 on Week

North American drilling activity jumped by six rigs this week, adding to last week’s 28-rig climb, with the surge driven again by Canadian activity, as in recent weeks, Baker Hughes’ latest rig count report released Friday (1/23) showed.

The combined change in U.S. and Canadian rig counts left the total North American rig count at 775, versus the prior week’s tally of 769. Year-over-year, North American rigs were lower by 46 from the 821 rigs operating during the same week last year.

Canada’s rig count rose by five week-over-week to 231. The U.S. rig count rose by one to 544, adding to the North American tally.

In the United States, land-based drilling activity rose by two rigs to 526 for the week.   

Inland waters saw no change, remaining at three rigs. Offshore drilling fell by one rig to 15.

Year-over-year, U.S. rigs were lower by 32 from the 576 reported during the same week last year.

U.S. rigs drilling for oil rose by one to 411. Those drilling for gas were unchanged at 122. The miscellaneous rig count was also flat at 11.

By drilling type, horizontal and vertical platforms both added a rig each at 476 and 13, respectively. Directional rigs slipped by one to 55.

EIA: Storm Fern Could Boost NatGas Demand, Price Concerns

Concerns over U.S. heating demand and prices could get more pronounced with this weekend’s Storm Fern, which has already driven spot natural gas to above $8 mmBtu, the Energy Information Administration warned Friday (1/23).

“When cold weather hits, especially over a large swath of the country, we often see increased energy demand for space heating, in turn raising demand for both electricity and natural gas,” the EIA said.

The agency noted that the daily spot price for natural gas reached nearly $8.15 mmBtu on Thursday (1/22). Spot, or cash, gas prices reached a high of $10.07 mmBtu in mid-January 2025.

In Friday’s trade, the front-month gas futures contract on the Henry Hub peaked at $ 5.396 mmBtu, up from last year’s close of $3.686.

Analysts caution that Winter Storm Fern could cripple energy infrastructure from the Plains to the Northeast by triggering gas freeze-offs and distribution failures.

PJM Interconnection anticipates an unprecedented winter peak of 145,700 MW as the severe weather system pummels the Mid-Atlantic region through the weekend.

API: Congress Needs to Act Swiftly on E15 Uncertainty

Congress needs to move forward urgently with legislation to allow nationwide year-round sales of the E15, the American Petroleum Institute (API) said Thursday (1/22) amid debate over the final form and specifications for the gasoline blend.

“Prolonging this uncertainty risks harming consumers and fuel markets,” API Vice President of Downstream Policy Will Hupman said in a statement issued by the group whose 600 members include a majority of the 132 operable refineries in the United States.

Under current rules, E15 sales are restricted during the summer driving season in much of the country due to federal vapor pressure requirements, which can influence gasoline blending and refinery production planning.

The Renewable Fuels Association (RFA), in a separate statement issued Thursday, said lawmakers appear poised to exclude E15 language from the House funding bill and instead create a Rural Domestic Energy Council to study the potential of future legislative options related to E15 and other renewable fuels.

Both API and RFA said they will continue engaging with lawmakers as legislative discussions continue, though the timing of any potential resolution remained uncertain.

During high-demand periods, E15, which contains15% ethanol, offers consumers price relief against standard E10 gasoline. Removing summer restrictions for the blend will also ensure year-round consistent supply that prevents price spikes often caused when retailers switch the sale of fuel sold during peak travel seasons.

Analysis: Risks of U.S. Drilling Rut Rise as Prices Slide

In light of crude oil prices slipping  below break-evens for some U.S. drillers, production may have already peaked – especially if prices continue to slide amid a growing global glut.

Crude prices are still above levels required to cover expenses for existing wells but are on the brink of sliding into territory where drilling becomes uneconomical. Oil producers in the Permian require a minimum average WTI spot price in the high $50s bbl if not low $60s bbl to profitably drill new wells, a necessary requirement for keeping production afloat as output tends to decline as a well matures. A Dallas Federal Reserve survey conducted last year even found an average WTI spot price of $61 bbl to $70 bbl was needed.

These thresholds are above many current price forecasts given an expected global crude overhang of several million bpd this year. The U.S. Energy Information Administration in its latest Short-Term Energy outlook expects an average WTI spot price of just under $55 bbl in the first quarter and just under $50 bbl by year end.

Consequently, the EIA believes that U.S. crude production has already peaked in the fourth quarter of 2025, and predicts marginal declines throughout 2026 before dropping 2.5% in 2027.

Drilling activity has already been slowing in the current low-price environment but was still high enough for productivity gains to compensate for the slowdown. Prices falling under break-even thresholds, however, could drastically change this picture.

On the flip side, 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. The latest Dallas Fed Energy Survey, conducted in December, found that industry executives were far more optimistic than EIA analysts. Respondents expected WTI to average $63 bbl this year and $69 bbl in 2027, high enough to keep production near or even above current record levels.

Fewer oil rigs would also mean less associated gas production, which accounts for well over a third of U.S. natural gas production. For refiners, a drop in crude prices may be less enticing if it comes alongside higher input costs for the more energy intensive parts of fuel production like desulphurization, particularly given that these processes are necessary to refine the most profitable parts of the barrel. At the same time, global crude supply additions are rapidly outpacing refinery capacity growth, meaning the divergence between product and crude prices is likely to continue, guaranteeing healthy margins. The U.S. is even poised to lose refining capacity this year – at a greater rate than even oil the most pessimistic models predict for oil production declines.

DoE Targets 35 GW of Backup Power to Blunt Storm Fern

The Trump administration wants U.S. grid operators to tap as much 35 GW of unused backup electricity at data centers to mitigate the impact of this weekend’s Winter Storm Fern, which is expected to cause significant power outages, the Department (DoE) announced Friday (1/23).

“We have identified more than 35 GW of unused backup generation that exists across the country and are taking action to ensure that if the nation needs it, the generation will be made available,” Energy Secretary Chris Wright said, adding that data center operators have been told to maintain communications with the DoE and be on standby to divert supply.

Energy experts expect Winter Storm Fern to strain infrastructure from the Southern Plains to the Northeast, potentially causing natural gas freeze-offs and distribution line failures.

The DoE estimates that power outages cost the American economy $44 billion annually, making the mitigation of storm-driven blackouts a primary financial and safety priority.

The North American Electric Reliability Corporation has cautioned that aggregate peak power demand is rising at record rates, up 20 GW from the previous year.

PJM, the nation’s largest grid operator, has forecast an all-time winter peak of 145,700 MW as Storm Fern moves through the Mid-Atlantic this weekend.

Analysis: U.S. Refining Rates Ease, Still At 5-Yr High, EIA says

U.S. refining rates have edged lower in the week ending January 16, the Energy Information Administration reported on Thursday (1/22). Whether this was the harbinger of a late start to maintenance season has yet to be determined, as refiners continued to operate at the fastest pace in five years.

EIA’s latest short-term energy outlook published last week contained a large upward revision to gasoline price expectations. U.S. wholesale gasoline is forecasted to average $2.01 gallon in the first quarter of 2026, which is  8.6% higher than in December’s report, propelled by a 7% to 8% upward adjustment to crude spot averages.

Incentivized by high crack spreads and refining margins, domestic refiners have been maximizing operations and delaying some non-essential maintenance work over the past few months. Crude oil inputs averaged 16.83 million bpd over the past four weeks, up 2% year-on-year and more than 9% above the five-year average. This came despite a 1% drop in refining capacity. Average utilization clocked in at 94.5%, compared to 90.9% in the comparable time span in 2025.

Product cracks and crude oil prices have been diverging in the second half of 2025 amid a persistent tightness in middle distillates. In October, a European gasoil rally sent global diesel prices soaring, leading already elevated crack spreads to increase by more than 30% in a span of a few weeks. A similar pattern repeated throughout January: the 3:2:1 crack spread versus WTI, for instance, rocketed from $19.84 bbl to $25.41 bbl in the course of two weeks as NYMEX traded RBOB and ULSD futures rose to two-month highs.

Surging crack spreads in January kept refining operations in the U.S. stayed elevated for longer than in previous years, when they would typically drop by more than 1 million bpd by the third week of the month. The comparatively small decline of 350,000 bpd in crude inputs reported for last week is another sign that refiners have been delaying maintenance as much as possible to profit from unusually high margins.