PNW Sub Oct Prem Basis Spikes by 13cts, Hits 10-Mo High

MIAMI, FL (DTN) — Pacific Northwest Sub Octane Premium basis surged by 13cts on Monday (3/30) to a 58.5cts premium over May NYMEX ULSD  futures contract, reaching a 10-month high due to high demand and limited supply.

Bids for PNW Sub Octane Premium basis were heard in the market at a 58ct premium, with no trades confirmed at that level. This was the steepest increase since May 29, when the basis was 60.25cts, according to DTN. So far in the year, PNW Sub Octane Premium basis has climbed 58.5cts, the same data showed. 

Today’s hike was driven by firm demand, with the same basis pegged at a 45.5cts premium to May futures contract in the previous trading session on Friday (3/27). 

Refinery closures are contributing to the tightness in the market, following the shutdown of Valero’s 145,000 bpd Benicia, California,  refinery in late 2005 and the upcoming closure of 139,000 bpd Phillips 66 Wilmington refinery in April.