NYH, Houston Jet Fuel Basis Narrow as ULSD Futures Rally

HOUSTON, TX (DTN) – The basis for jet fuel in the New York Harbor and Houston spot markets fell Tuesday (3/17) as the underlying April ULSD futures contract rallied 5% on the back of the diesel supply tightness driven by the Middle East conflict.

Basis for jet fuel on the Buckeye Pipeline in the New York Harbor dropped by 15cts, narrowing to near parity with the April ULSD futures contract on the New York Mercantile Exchange (NYMEX).

Meanwhile, at the Houston origin of the Colonial Pipeline, jet fuel was heard traded at a 1.50cts premium over the front-month NYMEX, or 10cts lower than the level it was seen at in the previous session.  

U.S. Energy Information Administration data showed that jet fuel stocks in the Gulf Coast dropped by 800,000 bbl to 12.8 million during the week ended March 6. Inventories were also 2.1 million bbl lower than volumes reported in the same period a year earlier.