MARKETWIRE ALERTS
Miguel E. Andujar
DTN Refined Fuels Market Reporter
MARKETWIRE ALERTS
MarketWire Afternoon News July 23rd:
Updated at 5:00 PM ET
HEADLINES:
-- Los Angeles Jet Fuel Basis Rises on Trading, Low Supply
-- Midwest Jet Basis Widens as NYMEX ULSD Soars
-- Analysis-Brent Back Above $100 in New Supply-Demand Shock
-- CEC: California Diesel Stocks Fall 12,000 Bbl
-- CEC: California Gasoline Stocks Rise 83,000 Bbl
-- Flint Hills Corpus Christi Refinery Reports Flaring Event
-- EIA: US NatGas Storage Reports 32 Bcf Weekly Injection
-- TotalEnergies Q2 Output Dips 4% Y-o-Y on Mideast Conflict
-- BTS: North American Freight Up 16.1% in May
NEWS
Los Angeles Jet Fuel Basis Rises on Trading, Low Supply
Cash jet fuel basis strengthened in active Los Angeles trading Thursday
(7/23) amid a 5% rally in front-month NYMEX ULSD futures, triggered by the
Middle East conflict-driven supply tightness.
Prompt Los Angeles jet fuel basis was heard traded at a 16cts discount to
August NYMEX ULSD futures, narrowing 12.75cts from the previous session.
Limited jet fuel availability on the U.S. West Coast region also underpinned
basis strength.
The U.S. Energy Information Administration reported on Wednesday (7/22),
that U.S West Coast jet fuel stocks inventories fell by 500,000 bbl to 11.6
million bbl in the week ended July 17. Stocks were 800,000 bbl below the volume
reported during the same week a year earlier.
Midwest Jet Basis Widens as NYMEX ULSD Soars
Midwest spot jet fuel basis\ weakened further across regional hubs Thursday
(7/23), as cash discounts expanded under the weight of a massive rally in
underlying futures markets.
Group 3 jet fuel experienced a sharp basis decline, talked at a discount of
50cts gallon to the August NYMEX ultra-low sulfur diesel (ULSD) futures
contract. The daily widening of 21cts pushed cash differentials significantly
lower, pointing to localized physical pressure and buyer resistance across the
southern tier of the Midcontinent.
Chicago jet fuel also saw its basis slide further into negative territory,
talked at an 85cts gallon discount to the August NYMEX ULSD contract. The 3cts
daily widening extends a multi-session weakening trend in the Chicago cash
market, as local spot demand continues to lag behind surging energy futures.
The softer cash market occurred even as futures prices surged dramatically
across the petroleum complex. August NYMEX ULSD futures surged $0.2150 to
settle at $4.3416 gallon. The rally in diesel futures tracked Thursday's
two-month highs in crude futures, with September ICE Brent peaking at $102 and
WTI hitting $93.50.
Mounting geopolitical risks continue to fuel flat-price gains across energy
markets, with escalating threats to maritime transport in critical waterways
tightening the outlook for global middle distillates.
In the Midwest, underlying physical supply flexibility remains constrained
by ongoing labor disruptions at BP's 440,000 bpd Whiting refinery, even as
regional cash discounts broaden against the futures rally.
Analysis-Brent Back Above $100 in New Supply-Demand Shock
Global crude benchmark Brent climbed back to $100 bbl Thursday (7/23), the
first time since May, as attacks on Saudi oil cargoes in the Red Sea added to
already embattled conditions for shipping on the Strait of Hormuz, raising the
stakes for both global energy supply and downstream demand.
By 12:20 pm ET, ICE Brent for September delivery was at $100.26 bbl, up
$6.19 or 6.7% on the day, after setting an intraday high at $101.20. The last
time it was higher was when it peaked at $102.77 on May 22.
The surge in Brent pricing follows targeted strikes by Houthi rebels on
Saudi tankers near the Bab el-Mandeb Strait and other naval encounters reported
south of Hormuz. The escalation triggered immediate warnings from Washington,
with U.S. President Donald Trump threatening military action against Iran and
Houthi forces if trade flows remain blocked. Trump has already warned that the
U.S. will strike critical Iranian infrastructure, including bridges and power
plants, for every vessel attacked on Hormuz.
The Middle East crisis adds to a fragile global supply picture, already
stressed by disruption to flows on the Black Sea caused by the Ukraine war.
Recent drone strikes near the Caspian Pipeline Consortium terminal have
repeatedly halted loadings, choking off critical light sweet crude exports to
European refiners.
The supply outages override domestic inventory buffers reported by the U.S.
Energy Information Administration. U.S. commercial crude inventories rose by
2.0 million bbl to 411.7 million bbl during the week ended July 17, accompanied
by modest builds in gasoline and distillate stocks.
Attention is also turning to the downstream pass-through, where $100 bbl
crude risks triggering another round of demand destruction. U.S. retail
gasoline, already averaging above $4.00 gallon, faces immediate more upward
pressure as crack spreads widen.
Over the mid-to-longer term, historical market precedent suggests sustained
pump prices above $4.00 gallon act as a primary rationing mechanism, curbing
discretionary driving and forcing commercial fleet efficiencies.
Analysts are also evaluating whether these demand-side contractions will cap
crude's upside or if severe transit bottlenecks will drive prices higher.
Crude "futures have entered an 'overbought' condition with a downside
correction due," BOK Financial said in a note to its clients, urging them to
brace for volatility.
Diesel prices carry even higher vulnerability than gasoline due to
persistent multi-year inventory lows across major refining centers, a shortfall
now severely exacerbated by Russia's diesel export ban.
With Moscow keeping its fuel domestic, global supply is constrained further,
meaning U.S. diesel, currently retailing at a national average of $5.13 gallon,
is psychologically poised to test the $5.35 to $5.50 band if crude holds at
triple-digit levels, compounding freight surcharges throughout domestic
logistics networks.
CEC: California Diesel Stocks Fall 12,000 Bbl
CEC: Weekly Fuels Watch - California Diesel Stocks and Production
For week ended: July 17, 2026
Refinery Stocks (bbl) Production (bbl)
2,513,000 1,527,000
W/W -12,000 182,000
-0.5% 13.5%
Y/Y -91,000 -154,000
-3.5% -9.2%
CEC: California Gasoline Stocks Rise 83,000 Bbl
CEC: Weekly Fuels Watch - California Gasoline Stocks and Production
For week ended: July 17, 2026
Refinery Stocks (bbl) Production (bbl)
9,642,000 5,285,000
W/W 83,000 43,000
0.9% 0.8%
Y/Y -3,201,000 -539,000
-24.8% -9.3%
Flint Hills Corpus Christi Refinery Reports Flaring Event
Flint Hills Resources reported on Thursday (7/23) an emissions event at its
230,000 bpd West Refinery in Corpus Christi, Texas, according to regulatory
filings with the state.
The event began at 11:12 a.m. on Monday (7/21), and concluded at 4:41 a.m.
on July 22, originating from the facility's West Fluid Catalytic Cracking Unit
(FCCU) 1st Stage Flare.
Among the six air contaminants released, sulfur dioxide accounted for the
largest share at an estimated 459 pounds, followed by benzene at 289 pounds and
nitrogen oxides at 61 pounds. The release also included 13 pounds of
unspeciated volatile organic compounds (VOCs), 2.5 pounds of hydrogen sulfide,
and 0.15 pounds of 1,3 butadiene.
EIA: US NatGas Storage Reports 32 Bcf Weekly Injection
Energy Information Administration data released midmorning Thursday (7/23)
show a 32 billion cubic feet injection into U.S. natural gas storage to 3.056
trillion cubic feet in the week ended July 17.
Natural gas in U.S. storage is 0.5% lower than last year and 6.4% above the
five-year average of 2.873 Tcf.
Regionally, EIA reports the East registered a 17 Bcf injection to 631 Bcf, 0.3%
less than a year ago and 2.4% higher than the five-year average.
Natural gas in storage in the Midwest increased 17 Bcf week-on-week to 766 Bcf,
a 3% surplus compared to the same week a year ago and 5.9% higher than the
five-year average.
Mountain region natural gas in storage decreased 0 Bcf, up 0.8% year-on-year to
19.4% above the five-year average.
South Central storage rose 2 Bcf to 1105 Bcf, 4.7% less than in the same week
last year and 3.4% above the five-year average.
TotalEnergies Q2 Output Dips 4% Y-o-Y on Mideast Conflict
TotalEnergies reported on Thursday (7/23) hydrocarbon production of 2.4
million barrels of oil equivalent per day (boepd) in the second quarter of
2026, down 4% year over year and 6% below the first quarter of 2026.
The drop was primarily driven by an 8% negative impact from the conflict in
the Middle East, alongside a 2% natural field decline and a 1% pricing effect,
according to a company statement.
These headwinds were partially offset by a 4% contribution from project
start-ups and ramp-ups, including Mero-3, Mero-4 and Lapa SW in Brazil, Anchor
and Ballymore in the United States, Begonia and Clov Phase 3 in Angola, and
Mabruk in Libya, as well as a 3% improvement in plant availability.
"Despite a lower lifting level because of difficulties to access the Strait
of Hormuz, Exploration & Production posted adjusted net operating income of
$3.2 billion and cash flow of $5.8 billion, up by more than 25% over the
quarter", the company stated.
Excluding the Middle East conflict impact, production would have risen more
than 4% year-on-year. For the first half of 2026, hydrocarbon production
averaged 2.5 million boepd, down 2% versus the same period in 2025.
BTS: North American Freight Up 16.1% in May
SECAUCUS, NJ (DTN) -- North American transborder freight rose 16.1% in value
year-on-year in May, reaching $153.4 billion, Bureau of Transportation
Statistics data released Thursday (7/23) showed.
The growth came as cross-border freight activity between the United States,
Canada and Mexico was supported by gains across all major transportation modes.
Freight flows with Mexico increased 17.1% from May 2025 to reach $87.2
billion, while trade with Canada rose 14.8% to $66.1 billion.
Truck transportation remained the primary freight driver, moving $99.7
billion in cross-border shipments during May, representing a 15% increase
compared with a year earlier.
All other transportation modes also posted year-over-year growth during the
month. Pipeline movements rose 24% to $10.3 billion, vessel shipments climbed
37.7% to $11.1 billion and rail freight moved up 11.1% to $17.7 billion. Air
freight posted the largest percentage gain, surging 53.6% to $7.1 billion.
For energy markets, pipeline and waterborne routes remained primary conduits
for North American trade. Chicago, Port Huron and Minneapolis served as the top
pipeline connection regions for U.S.-Canada energy freight flows, while El
Paso, Hidalgo and Laredo led pipeline connections with Mexico.
Among waterborne energy connections, Port of Boston, Port Arthur and
Portland led U.S.-Canada flows. Port of Houston, Port Arthur and Texas City
remained the top southern border connections for waterborne energy freight.
Laredo, Texas, maintained its position as the largest overall freight
gateway, handling a total of more than $35.3 billion in transborder trade in
May.
Merchandise-wise, computer-related machinery and parts led commodity
categories at $33.1 billion, followed by vehicles at $21.9 billion and mineral
fuels, oils and waxes at $20 billion.
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