PNW ULSD Basis Plummets 10cts on Lower Offers

MIAMI, FL (DTN) — Pacific Northwest ULSD basis plunged by 10 cents to a 0.5cts premium to December NYMEX ULSD futures contract on Monday (11/17) on lower offers heard in the spot market. 

Market sources said an offer for PNW ULSD was heard at a 1 cent premium, but confirmation of a trade at that level was not confirmed at the time of publication.

The sharp drop on PNW ULSD follows weeks of price stability. The average spot price has been at plus 44.50cts since summer before sinking to 1.50cts on November 6 – its lowest level – of the year to rebound up to a 10.50cts premium on Friday (11/14).

Typically, Pacific Northwest ULSD prices remain steady for long periods, reflecting balance supply and demand fundamentals.

“ULSD bids strengthened last week as winter heating demand expectations and refinery maintenance along the West Coast shifted sentiment higher,” one trader said.

As of Monday, however, PNW ULSD experienced the most pronounced basis declines seen in the region this year.