US Cash Products-Midwest differentials extend gains, brokers warn of reversal
NEW YORK, Sept 19 (Reuters) -Cash differentials for gasoline extended a recent rally in the U.S. Midwest's Chicago and Group 3 spot markets as traders shored up supplies ahead of refinery outages, although brokers warned ample supplies could soon lead to a reversal.
Chicago CBOB gasoline CBOB-DIFF-MC gained 3 cents to trade 8 cents above the benchmark October RBOB gasoline futures contract RBc1 on the New York Mercantile Exchange, traders said.
Group 3 V-grade gasoline RUV-DIFF-G3 rose 4.5 cents to 18 cents above the benchmark, the biggest premium since October last year.
Differentials have rallied as the market is contending with downtime at some of the largest regional suppliers: Marathon Petroleum Corp's 300,000 barrel-per-day Catlettsburg refinery in Kentucky went offline for maintenance at this week, and BP Plc's 435,000 bpd Whiting refinery in Indiana is expected to begin maintenance as soon as next week.
The Chicago gasoline differential was at a 7 cent discount at the start of the month, whereas the Group 3 gasoline grade was at a 1.75 cents premium at that time.
Brokers warned those levels are too high relative to available stockpiles so a reversal could follow soon. Midwest gasoline stocks were at 46.03 million barrels on Sept. 13, 1% higher than last year and the highest seasonal level since 2021, according to data from the Energy Information Administration.
Midwest diesel grades were under selling pressure on Thursday. Chicago ultra-low sulfur diesel ULSD-DIFF-MC fell 2.5 cents to trade at parity with benchmark ULSD futures HOc1, whereas Group 3 diesel ULSD-DIFF-G3 fell quarter of a cent to 3 cents above futures, traders said.
In the U.S. Gulf Coast, gasoline trade rolled over to the 55th annual cycle of deliveries to New York Harbor on the Colonial Pipeline. Those deliveries will begin next month, so trades reference November futures RBc2, HOc2 instead of the benchmark October contracts.
Accounting for the difference between those contracts, Gulf Coast M3 conventional gasoline RU-DIFF-USG rose 4.45 cents to 3.25 cents above futures, market participants said. A3 CBOB gasoline CBOB-DIFF-USG gained 0.20 cents to 4.45 cents below futures, they said.
Distillates trade in the Gulf Coast is still on its 54th delivery cycle and reference benchmark ULSD. 62-grade ULSD ULSD-DIFF-USG was unchanged at 6.4 cents below futures.
In New York Harbor, bid and ask remain far apart on the M3 conventional gasoline RU-DIFF-NYH, and the differentials were assessed at 8 cents above futures, traders said.
Diesel for delivery in New York Harbor ULSD-DIFF-NYH fell quarter of a cent to 2.5 cents below futures, traders said.
Oil futures rose on Thursday, extending their recovery from last week's multi-year lows, after the U.S. Federal Reserve announced a large interest rate reduction and analysts said declining global stockpiles should tighten the market in the months ahead. O/R
October RBOB futures RBc1 rose 4.93 cents to $2.06 a gallon, while October ULSD rose 2.45 cents to $2.172.
Renewable blending credits rose slightly after government data showed credit generation slowed in August from July.
Ethanol blending (D6) credits RIN-D6-US for 2024 rose to 59 cents but later eased a bit to 58.75 cents each, traders said. They were trading between 57.75 cents and 58 cents each on Wednesday.
Biomass-based (D4) credits RIN-D4-US rose to 58.75 cents each, from 58 cents each, traders said.
Latest day | |||||
Timing | NYMEX Contract | Bid | Offer | Change | |
U.S. GULF COAST <0#P-USG, PPIM> * Scheduling | |||||
A3 CBOB gasoline CBOB-DIFF-USG | Cycle 64 | November RBOB | -4.25 | -4.75 | 0.20 |
M3 conventional gasoline RU-DIFF-USG | Cycle 64 | November RBOB | 3.00 | 3.50 | 4.45 |
62-grade ULSD ULSD-DIFF-USG | Cycle 64 | October HO | -6.65 | -6.15 | 0.60 |
54-grade jet fuel JET-DIFF-USG | Cycle 64 | October HO | -17.00 | -16.00 | 0.25 |
Heating oil HO-DIFF-USG | Cycle 64 | October HO | -20.00 | -18.00 | 0.25 |
NEW YORK HARBOR <0#P-NYH, PPIL> | Bid | Offer | Change | ||
M3 conventional gasoline RU-DIFF-NYH | Prompt | October RBOB | 6.00 | 10.00 | 0.00 |
F4 RBOB RBOB-DIFF-NYH | Prompt | October RBOB | -1.00 | 0.00 | 0.00 |
ULSD ULSD-DIFF-NYH | Prompt | October HO | -2.75 | -2.25 | -0.25 |
Heating oil HO-DIFF-NYH | Prompt | October HO | -50.50 | -50.00 | 0.00 |
Jet fuel JET-DIFF-NYH | Prompt | October HO | -10.50 | -9.50 | 0 |
MIDWEST 0#P-G3, 0#P-MC, IHPROD/MIDCO | Bid | Offer | Change | ||
Chicago CBOB gasoline CBOB-DIFF-MC | Cycle 3 | October RBOB | 7.75 | 8.25 | 3.00 |
Chicago ULSD ULSD-DIFF-MC | Cycle 3 | October HO | -0.25 | 0.25 | -2.50 |
Group Three gasoline RUV-DIFF-G3 | October RBOB | 17.75 | 18.25 | 4.50 | |
Group Three ULSD ULSD-DIFF-G3 | October HO | 2.75 | 3.25 | -0.25 | |
Reporting by Shariq Khan in New York; Editing by David Gregorio
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