Midwest Spot Products Slump on EIA Data; Group ULSD Firms
CRANBURY, N.J. (DTN) -- Spot product prices in the Midwest regional markets
were mostly lower following the release of bearish supply data for last week by
the Energy Information Administration, with most cash differentials weakening.
X-grade ultra-low sulfur diesel fuel in the Group 3 market was the exception,
with a strengthening differential in active trade offsetting the decline by
futures.
The EIA caught the market by surprise after reporting a surge in crude
supply of 7.3 million bbl when the market was expecting a drawdown because of
precautionary shut-ins in the Gulf of Mexico by rig operators ahead of Tropical
Storm Bonnie. Crude imports spiked above 11.0 million bpd to trigger the jump
in inventory, while refiners used less crude oil. Gasoline production surged
too, as refinery efficiency activity during the last decade boosts output.
Implied gasoline demand also spiked at 9.632 million bpd.
The New York Mercantile Exchange oil futures market, which was already down
before the EIA data was released, accelerated to the downside following the
supply report.
September crude futures tumbled to a one-week low at $75.90 bbl, trading at
the 1:00 PM ET hour at $77.01, down 49cts. August heating oil futures were
0.4cts lower at $1.9954 gal, up from a $1.97445 gal two-week low, with the
September contract down 0.19cts at $2.0279 gal. August RBOB futures moved off a
$2.0286 gal one-week low, down 0.95cts at $2.0537 gal, with the September
contract 0.75cts lower at $2.0566 gal.
In the Group 3 market, X-grade ULSD traded at premiums to August futures of
7.25cts, 7.35cts, 7.55cts and 7.6cts, where it traded last. Cash differential
was pushed up 0.7cts, with spot price up modestly at $2.0715 gal at last look.
In Chicago, ULSD maintained a 3.0cts premium to September futures, with spot
price down slightly at $2.0575 gal.
In the Group, N-grade conventional gasoline eased 0.25cts in cash
differential to a 4.5cts discount to August futures, with spot price pressed
down 1.35cts at $2.0070 gal. A-grade conventional premium narrowed its regrade
to a 12.0cts premium to N-grade, weakening 0.75cts in cash differential to a
7.5cts premium to August futures. Spot price fell 1.85cts to $2.1270 gal.
In Chicago, conventional gasoline eased 0.25cts in cash differential to a
4.5cts discount to September RBOB futures, with spot price down 1.0cts at
$2.0115 gal.
Brian L. Milne, 1.609.371.3328, brian.milne@telventdtn.com,
www.telventdtn.com. (c) 2010 Telvent DTN. All rights reserved.
