Chicago CBOB Basis Recovers from Multi-day Decline

DAVENPORT, FL (DTN) – Chicago September CBOB basis rebounded Wednesday (9/25), halting a multi-day downtrend as BP emerged as a buyer in the Midwest gasoline market, shifting from its more typical role as a seller.

CBOB for West Shore delivery was assessed at an 8.50cts discount to NYMEX October RBOB futures. That is a steep increase of 3.50cts from Tuesday’s 12 cts discount, breaking the downward trend of the past several trading sessions.

“The shift in price sentiment has to do with today BP becoming a buyer of gasoline. Usually, BP is a seller, and that shift alone put a lot of pressure on prices,” one source familiar with Midwest trading said.

The unusual buying activity follows reduced operating rates at BP’s Whiting, Indiana refinery, the Midwest’s largest fuel producer, after a recent shutdown.

Similar market moves were seen in the past when Whiting faced unplanned outages or extended maintenance, prompting BP to step in as a buyer to balance supply needs.

BP did not respond to request for comment as of publication time.