Midwest Refined Products Prices Surge on Whiting’s Fire

DAVENPORT, FL (DTN) – Chicago November CBOB and jet fuel basis strengthened sharply Friday (10/17) after a short-lived fire at BP’s Whiting refinery – the largest refinery in the U.S. Midwest – reignited supply concerns and sent regional prices higher.

Chicago CBOB basis was assessed at parity with November RBOB futures, a 23cts increase from the previous trading session when it settled at a 23cts discount on Thursday, DTN Energy data showed. Wolverine and Buckeye basis were also assessed flat to Chicago levels, with West Shore, Wolverine, and CBO spreads all quoted at parity. It marks the first time Chicago CBOB has traded flat to the RBOB futures price since August 5.

Chicago jet fuel basis also strengthened as it was assessed at a 20cts premium to November ULSD futures, a 30.5cts increase from Thursday when it was assessed at a 10.5cts discount. The last time Chicago jet fuel traded at this premium was on September 27 of last year, underscoring the market’s sensitivity to regional disruptions.

The price hike was driven by news of a fire at BP’s at its 435,000 bpd Whiting, Indiana refinery, the largest in the Midwest, early morning.

“The perception at the moment is that the largest refinery in the area may become a buyer of gasoline and diesel to fulfill obligations in the near term, which could keep markets tight over the coming days,” a trader operating in the Midwest market said.