U.S. Rack ULSD Up 16.8cts; Gasoline Rises 7.58cts

DAVENPORT, FL (DTN) – Wholesale rack prices for ultra-low sulfur diesel (ULSD) and gasoline moved higher again Wednesday (4/22) as physical markets strengthened alongside firmer futures on continued supply constraints amid a new phase of uncertainty in the Middle East conflict.

Nationwide ULSD rack prices averaged $3.8804 gallon, up 16.8cts from Tuesday’s level of $3.7124, according to DTN data. Conventional unleaded gasoline rack prices averaged $3.3302 gallon, up 7.58cts from the prior day’s $3.2544.

Futures prices moved higher as well in Wednesday’s early trading. Front-month May NYMEX ULSD futures rose 15.27cts to $3.8815 gallon, while May RBOB gasoline futures increased 3.64cts to $3.2462 gallon. WTI crude for May delivery climbed $1.56 to $91.23 bbl.

Futures rose amid on tit-fort-tat vessel seizures on the Strait of Hormuz by Iran and the U.S., after an abandonment of peace talks took the Middle East conflict into a new phase of uncertainty.  The seven-week long blockade of the Hormuz, the waterway for 20% of global petroleum liquids supply, has led to the most severe oil supply disruption in history and sent physical crude and product prices soaring.

ULSD racks moved higher across all regions Wednesday, with the largest increases in PADD 2 and PADD 1. Midwest ULSD rose 17.42cts to $3.6813 gallon, while East Coast prices increased 17.05cts to $3.8749 gallon. Gulf Coast values climbed 16.11cts to $3.8315 gallon. West Coast ULSD rose 16.00cts to $4.7259 gallon, maintaining the strongest regional premium, while Rocky Mountain prices posted the smallest increase, up 9.84cts to $4.1319 gallon.

Relative to the national ULSD rack average of $3.8804 gallon, PADD 5 held the widest premium at 84.55cts above the U.S. benchmark, followed by PADD 4 at 25.15cts above. PADD 1 traded near parity with the national average, while PADD 2 and PADD 3 remained at discounts of 19.91cts and 4.89cts, respectively.

On conventional unleaded gasoline racks, all regions moved higher Wednesday. Midwest gasoline posted the largest increase, rising 8.53cts to $2.8175 gallon. East Coast prices climbed 8.36cts to $3.0363 gallon, while Gulf Coast values increased 8.32cts to $2.9577 gallon. Rocky Mountain gasoline rose 4.02cts to $3.2063 gallon, while West Coast prices increased 6.01cts to $4.0724 gallon, maintaining the only premium position.

Compared with the national gasoline average of $3.3302 gallon, PADD 5 remained the only region trading at a premium, at 74.22cts above the benchmark. All other regions held discounts, led by PADD 2 at 51.27cts below the national average, followed by PADD 3 at 37.25cts and PADD 1 at 29.39cts. PADD 4 traded just slightly below the national benchmark.

Premium gasoline rack prices also moved higher across all regions, broadly in line with conventional gasoline. West Coast premiums remained elevated at $4.4640 gallon, while other regions posted steady increases.

The move higher across rack prices points to a market finding its footing after last week’s reset, with physical values starting to track the firmer tone in futures, while export demand remains a key driver after total U.S. crude and product shipments hit a record 12.7 million bpd last week. Market participants are now looking at today’s U.S. Energy Information Administration report to see if that strength in distillate and gasoline exports continues to support refined product prices.

Even with the recent volatility, structure has strengthened again, with RBOB backwardation near 9cts and ULSD back above a 10cts premium on the front month, signaling that prompt supply remains tight and demand for near-term barrels continues to hold firm.