Differentials for Chicago gasoline, ULSD, plummet on increased supply, slash in demand

New York — Differentials in the Chicago market began to finally feel the impact of the slash in demand caused by the coronavirus pandemic, shedding 16.5 cents/gal from Wednesday's assessment.

CBOB on the West Shore pipeline traded at NYMEX April RBOB minus 25 cents/gal in the midmorning, while pipeline RBOB shed 8.50 cents on the back of a trade flat to April futures.

"Refiners need to start cutting runs," a market source said, adding that the selloff could continue until cracks go negative as refiners pushed to clear tank space.

The last time Pipeline CBOB in Chicago was March 23, 2018, Platts data shows.

Prices at the pump have also seen dramatic losses, as more and more drivers stay home and off the roads.

The average pump price Thursday morning for regular grade gasoline was $2.23/gal, a loss of 18 cents/gal on the week, and a difference of 42 cents from this time last year, according to data published by US Auto Club AAA.

Meanwhile, ultra low sulfur diesel has continued to plummet in the Chicago area, most notably in the Buckeye Complex on a lack of demand for storage.

"If storage is almost full and everyone has more than they can hold, the price has to come off," one Midwest supplier said.

A trade for Buckeye Complex ULSD was heard at the NYMEX April ULSD futures contract minus 30 cents/gal Thursday morning. Platts assessed the market at April futures minus 14 cents/gal on Wednesday. This marks the lowest the market has been recorded at since Platts began assessing it on since July 2, 2018.

Pipeline ULSD was also heard lower Thursday morning, with a Badger Pipeline trade heard at April futures minus 35 cents/gal. Platts assessed the market at April futures minus 30.25 cents/gal Wednesday. The market was last seen at this level on January 11, 2019, when Platts assessed it there.