LA Diesel Basis Rises 10cts on Tightening Supply


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- Prompt Los Angeles diesel basis strengthened Wednesday 
(5/20) after federal data pointed to declining regional inventories for the 
product.

   Los Angeles diesel traded at a premium of 35cts gallon to June NYMEX ULSD, 
up 10cts from Tuesday's (5/19) level.

   The move up in the basis came as the U.S. Energy Information Administration 
reported Wednesday that West Coast distillate inventories dropped by 200,000 
bbl to 10 million bbl during the week ended May 15 and were 300,000 bbl lower 
from the same week last year.

   Distillate imports into the region climbed by 10,000 bpd to 18,000 bpd on 
the week, though imports were still 29,000 bpd lower than the same week in 
2025, EIA data showed.

   Beyond the headline EIA inventory dip, the Los Angeles diesel basis is 
surging due to the structural loss of roughly 20% of California's traditional 
refining capacity following the late-2025 closure of Phillips 66's Wilmington 
facility and Valero's Benicia idling.

   Lacking pipeline links to the Gulf Coast, the West Coast is highly dependent 
on marine imports. Ongoing maritime blockades in the Middle East have, however, 
crimped regular flows to the region, adding to the supply squeeze.




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