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US West Coast diesel differentials decline after spring peak

https://www.chemnet.com   Jul 18,2019 S&P Global Platts
US West Coast diesel differentials have fallen dramatically since summer began as stocks and refinery utilization percentages have recovered from the spring maintenance season.

California-grade diesel in Los Angeles was assessed Wednesday at NYMEX August ULSD plus 2 cents/gal, its lowest price since it was flat to futures on June 20. The grade was assessed at front-month futures plus 38 cents/gal May 7, its highest level since November 2011.
West Coast refinery maintenance peaked in the week ended March 29 when about 3.42 million b/d of distillation capacity was under work, compared to just 1.45 million b/d of expected capacity for this week, according to Platts Analytics.

Refinery utilization finished the week ended July 12 at 95.3%, according to Energy Information Administration data published Wednesday. From late March to late May, refinery utilization stagnated below 90%, the time when the differentials had spiked.

As refineries came back online, CARB-diesel supply increased. Production for the week ended July 5 rose 22.7% on the week to 1.457 million barrels, according to the latest California Energy Commission data.

San Francisco CARB-diesel was assessed Wednesday at August futures plus 6 cents/gal, the lowest price since June 27.

The supply increase has not been isolated to just California. Total West Coast ULSD stocks rose 1 million barrels last week to 12.481 million barrels, EIA data showed. From the end of April to the end of May, stocks remained under 12 million barrels.

Diesel costs in Portland were August futures plus 6.50 cents/gal, the lowest level since June 21.
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