MARKETWIRE ALERTS
Maria Eugenia Garcia
DTN Energy Editor
MARKETWIRE ALERTS
MarketWire Afternoon News Aug 3rd:
Updated at 5:00 PM ET
HEADLINES:
-- Midwest CBOB Basis Strengthens to 3-Month High
-- Chevron Adds HF Sinclair, Reinkert as Base Oil Partners
-- E15, SNAP Changes Unveiled
-- Flint Hills Reports Flare at Corpus Christi Gas Unit
NEWS
Midwest CBOB Basis Strengthens to 3-Month High
Midwest CBOB basis differentials strengthened Monday (8/3), with Chicago
cash values hitting a three-month high, as traders bid up spot market premiums
to offset a sharp drop in underlying benchmark futures.
Chicago, Buckeye, and Wolverine pipeline CBOB differentials were heard
traded at a 19.5cts premium to the September contract, strengthening 1.5cts on
the day.
DTN pricing data showed the premium fetched by Chicago CBOB matched levels
last attained on May 4.
On the Group 3 complex, CBOB traded at a 2.75cts discount to September NYMEX
RBOB futures, narrowing by 12.25cts on the session.
The spike in Midwest CBOB values came as gasoline prices tumbled 8% in
Monday's futures trading. September NYMEX RBOB futures fell $0.2549 to settle
at $2.9667 gallon on hopes for an easing of Middle East shipping disruptions,
spurring cash buyers to raise differentials to secure physical barrels.
Chevron Adds HF Sinclair, Reinkert as Base Oil Partners
Chevron Products Company will expand its North American base oils
distribution network effective May 1, 2027, through complementary agreements
with HF Sinclair Lubricants & Specialties and Renkert Oil, , according to
separate company statements released Monday (8/3).
Under the agreement, HF Sinclair Lubricants will serve as Chevron's
exclusive distributor of Group II base oils in Canada and existing U.S.
customer territories, with non-exclusive rights in select additional U.S.
regions.
Renkert Oil will continue distributing Paralux and Paramount process oils
across the United States, Canada and Europe, alongside NEXBASE Group III base
oils and Chevron Group II base oils in U.S. markets outside HF Sinclair's
exclusive territory.
The agreements also support HF Sinclair's previously announced plans to
retire its base oil refining assets in Mississauga, Ontario, with the full
transition to the new supply model expected by the second half of 2027.
E15, SNAP Changes Unveiled
Senate Farm Bill Text Includes E15, Overhauls SREs and Adds 1-Year SNAP Cost
The Senate farm bill markup draft now includes year-round E15, major small
refinery exemption changes and a one-year delay in SNAP state cost sharing
ahead of Thursday's markup.
The latest Senate farm bill text released ahead of Thursday's committee
markup includes a year-round extension of E15, major small refinery exemption
(SRE) reforms and a one-year SNAP cost-share extension.
The revisions, among more than 80 pages of other changes, seek to align the
Senate bill more closely with the House-passed version.
"Members on both sides of the aisle will find their priorities reflected in
this bill. It also responds to concerns that states need additional time to
strengthen administration of SNAP benefits and reduce payment error rates with
a commonsense solution," Senate Agriculture Chairman John Boozman, R-Ark., said
in a news release.
Much of the new text remained behind closed doors before its release to
Democrats, commodity groups and the public late on Friday.
Boozman scheduled the committee markup for Thursday, Aug. 6, at 9:30 a.m.
EDT.
But the text no longer has the same coalition of support for E15. The
American Petroleum Institute opposed the E15 language over the weekend,
breaking its lockstep with the National Corn Growers Association.
The Center on Budget and Policy Priorities, among other hunger
organizations, also criticized its lack of a two-year extension of SNAP state
cost sharing because the proposal only delays state's paying penalties until
2028.
Senate Agriculture Committee Ranking Member Amy Klobuchar, D-Minn.,
responded to the release, saying, "I look forward to working on the details of
a bipartisan Farm Bill that can pass on the Senate floor as it will need both
Republican and Democratic support. Senate Ag Democrats have been clear that a
Farm Bill must meet the needs of both farmers and families across America."
The draft also includes mandatory fertilizer reporting by manufacturers and
wholesalers. The Fertilizer Institute asked the committee in May to find
alternative solutions, but the full text of the Fertilizer Transparency Act of
2026 was included.
E15 AND SMALL REFINERY EXEMPTIONS
The E15 and SRE provisions were welcomed by corn and renewable fuels groups,
although the original alliance between oil and crop commodity groups has since
fractured.
Under the proposal, the process for granting small refinery exemptions would
be replaced beginning in 2027.
The Environmental Protection Agency would be required to resolve outstanding
SRE petitions by October 2028 and reallocate most exempted renewable fuel
obligations to other refiners. The new system would replace annual petitions
with a fixed compliance reduction based on historical oil production data.
Small independent refiners, often represented by the Small Refineries of
America, have yet to issue a public statement.
However, one official in the refining industry that spoke with DTN on the
terms of anonymity said, "They (small refiners) see this as a better solution
to the House bill. Ideally, it would be great to have something that does not
divide the industry. But to go from a threat to having to close some
facilitates to having those exempt, is lifesaving."
The bill would also restore certain renewable identification numbers (RIN)
credits for small refineries that retired credits while 2016-18 SRE petitions
were pending or later denied.
The proposal would allow refineries averaging up to 75,000 barrels of oil
production per day to qualify as small refineries eligible for compliance
reductions. However, any refinery that does not meet the small refinery
definition in 2028 or a later year would permanently lose eligibility for
future compliance reductions.
This is where larger refiners, represented by the American Petroleum
Institute, object. While API supports year-round E15, it opposes provisions
that would limit SRE eligibility and require remaining obligated parties to
absorb additional renewable fuel obligations from exempted volumes.
In a statement, API Senior Vice President of Government Relations Kristin
Whitman said, "The proposal included in the Senate Farm Bill fails to deliver
that balanced approach, replacing it with flawed provisions that weaken
America's fuel supply instead of providing the long-term certainty consumers,
farmers, biofuel producers and refiners need. API opposes this proposal and
urges Congress to reject it."
The proposal could help secure support from Republican senators representing
independent oil-producing states during both the committee markup and eventual
floor consideration.
Majority of farm group statements looked toward the future after a
successful markup.
"We urge Congress to get a five-year farm bill across the finish line this
year," the American Soybean Association said in a statement.
NEW DYNAMICS
The E15 proposal would establish permanent nationwide access to E15 and
require EPA to update E15 labeling and underground storage tank rules within 18
months.
The changes are intended to increase domestic ethanol demand, which
supporters view as the next step following passage of the legislation.
But over the weekend, some Trump supporters criticized Republican senators
online for discussing E15 and the farm bill, arguing other priorities,
including the SAVE America Act, should come first.
Election integrity legislation requiring voter identification passed the
House in July but faces resistance in the Senate, where Republicans have
questioned whether it has enough support to advance.
The Senate is expected to vote this week on a continuing resolution to fund
the government through Dec. 11. The August recess is expected to start on
Friday with lawmakers scheduled to return Sept. 14 with a limited fall agenda
that includes full-year appropriations, supplemental farm aid, nominations and,
if time allows, a farm bill.
ADDED PROVISIONS: FERTILIZER REPORTING
The draft also includes the Fertilizer Transparency Act of 2026, which would
establish mandatory fertilizer reporting.
Fertilizer manufacturers and wholesalers would report weekly prices for
nitrogen, phosphorus, potassium and fertilizer products, along with quantities
manufactured and marketed, to USDA.
USDA would publish aggregated national and regional data while keeping
individual company information confidential. Agricultural cooperatives and
fertilizer retailers that are not manufacturers would not be required to report
but could voluntarily submit data.
In May, The Fertilizer Institute testified that the bill needed
improvements. The group claimed the legislation "would place differential
burdens on the many parts of the fertilizer supply chain, potentially
advantaging foreign producers over domestic production and supply, and would
not provide accurate price transparency as sought."
DTN reached out to TFI for comment on its inclusion and on whether changes
were made to the earlier released bill text.
Other additions include grassland cost-share payments, agricultural grants
for veteran education and training, forestry data tracking, community college
agriculture grants and a study on barriers to USDA programs for organic
producers.
ONE-YEAR COST SHARE ENOUGH?
One provision that could help make Thursday's Senate farm bill markup
bipartisan is the one-year delay in SNAP state cost sharing.
Beginning in fiscal year 2029, states with SNAP payment error rates of 6% or
higher would begin contributing -- delaying the One Big Beautiful Bill proposal
by one year. Starting in fiscal year 2031, states with error rates of 10% or
higher would pay 20% of benefit costs, offsetting lost near-term federal
savings from the one-year delay.
The proposal would give states additional time to prepare for the new costs.
Democrats had sought a mix of one- or two-year delay, making it unclear whether
the proposal will satisfy Democratic lawmakers.
The National Governors Association and the Center on Budget and Policy
Priorities have argued that the cost-share requirement should be delayed until
2030.
Sharon Parrott, president of the Center on Budget and Policy Priorities,
said on social platform X over the weekend, "To be clear: it does not give
states any more time to lower the costs they will face by reducing errors, only
more time until the bill comes due."
While states would have more time to prepare, Parrott said, "it will still
be based on error rates for this fiscal year, which is nearly over. States
won't be able to lower their costs even if they achieve what cost shift
proponents say they want moving forward -- reduced errors."
She said an unfolding hunger crisis makes the cost shift an important first
step. "Kids in this country deserve better," she said.
Flint Hills Reports Flare at Corpus Christi Gas Unit
Flint Hills Resources reported a refinery flare event at its #2 saturated
gas unit at its 269,500 bpd Corpus Christi West Refinery, according to a
filing with the Texas Commission on Environmental Quality.
The event occurred between 3:35 p.m. and 5:35 p.m. CT on Saturday (8/1).
The event involved the refinery's #2 saturated gas unit and vented through
the First Stage Flare, according to the initial filing released on Sunday (8/2).
Estimated emissions included approximately 77 pounds of nitrogen oxides, 68
pounds of sulfur dioxide, 29 pounds of propane, 19 pounds of benzene and 17
pounds of n-butane.
Flint Hills also reported ambient air monitoring at reference points 18 and
19 detected 0% lower explosive limit and no carbon monoxide, hydrogen sulfide,
sulfur dioxide or volatile organic compounds.
The cause of the incident remains under investigation, the filing stated.
The refinery primarily produces jet fuel, diesel and gasoline.
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