Group 3 CBOB Basis Surges 47.75cts in Broad Gasoline Rally


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Group 3 CBOB differentials surged Tuesday (9/1) to 
push cash values for Midwest gasoline higher alongside gains in NYMEX RBOB, 
joining a broadly higher finish across energy futures.

   The discount for Group 3 CBOB narrowed by 47.75cts to stand at 2.25cts 
against the October NYMEX RBOB benchmark. The outsize leap was primarily a 
structural adjustment reflecting NYMEX RBOB's official transition to October as 
the front-month contract from the prior September.

   Across regional pipeline networks, basis adjustments were far more modest. 
Chicago CBOB narrowed by 1.5cts to a discount of 11.5cts gallon against the 
October benchmark.

   In the Buckeye Complex and Wolverine markets, CBOB differentials narrowed by 
1ct each on the day to stand at an 8cts gallon discount to October futures.

   The gains in physical gasoline came as October RBOB settled up 5.81cts on 
the day at $3.1351 gallon, climbing from its previous close of $3.0770 gallon.

   Despite the daily gain, gasoline futures trailed the rally seen in 
distillate markets as high regional refinery runs of 96.8% -- aimed at 
capturing peak diesel margins -- contributed to a secondary surplus of gasoline 
blendstock.

   The front-month's transition to October futures also removed the summer 
driving season premium, capping gains for the new prompt contract relative to 
the rest of the barrel.




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