Ultra-low sulfur diesel stocks on the Gulf Coast built to a record high during the week ended July 31, rising 1.19 million barrels to 54.69 million barrels, US Energy Information Administration data released Aug. 5 showed. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin.
This marks the highest regional stocks have been since the EIA began recording the data during the week ended April 9, 2004. Regional net production also saw an uptick to a multi-month high during the week that ended July 31, gaining 66,000 b/d to 2.72 million b/d, EIA data showed. Net production on the Gulf Coast was last seen higher during the week ended April 3 when it totaled 2.77 million b/d, the data showed. While production strengthened, area refinery utilization in the region decreased 0.9 percentage point to 82.3%, the data showed.
Strengthening stock and production levels on the Gulf Coast come as the ULSD market reached a one-week low on August 4, with S&P Global Platts assessing the market at the NYMEX September ULSD futures contract minus 5.60 cents/gal. The market was last seen lower on July 28 when it was assessed at September futures minus 5.65 cents/gal.
In the Midwest, diesel inventories also saw a large build, increasing 851,000 barrels to 34.22 million barrels during the week that ended July 31, EIA data showed. Regional stocks were last seen higher during the week that ended June 12, when they totaled 34.82 million barrels, the data showed.
While stocks in the Midwest saw a build, regional net production fell 17,000 b/d to 1.06 million b/d, EIA data showed. Area refinery utilization decreased 0.5 percentage point to 86.4%, the data showed.
In Group 3, X grade appears to have been impacted by the strengthening Midwest stock levels, which are well above the four-week average at 33.60 million barrels and the five-year average at 31.41 million barrels, EIA data showed. Platts assessed X grade at September futures minus 5.25 cents/gal on August 4. The market was last assessed this low on July 21, and lower on July 20 at prompt-month futures minus 6 cents/gal.
ATLANTIC COAST STOCKS DRAW DESPITE MARKETS FALTERING
On the Atlantic Coast, diesel stocks drew 180,000 barrels to 61.88 million barrels during the week that ended July 31, EIA data showed. Despite the draw in stocks, the current level is still above four-week average at 61.62 million barrels, and the five-year average at 46.44 million barrels, the data showed. Regional net production fell 3,000 b/d to 188,000 b/d, while area refinery utilization increased 5.1 percentage points to 52.1%, the data showed.
With the current stock level still well-above the four-week and five-year averages, Atlantic Coast diesel markets have softened this week. Platts assessed ULSD off the Colonial Pipeline at September futures minus 50 points/gal on Aug. 4 the lowest it has been since June 12 when it was assessed at prompt-month futures minus 65 points/gal. ULSD in both the Buckeye Pipeline and barge was assessed at September futures minus 75 points/gal on Aug. 4. Both markets were last seen lower on June 11 when they were assessed at prompt-month futures minus 1.10 cents/gal.