US weekly ethanol production rose, according to the US Energy Information Administration report on Thursday.
For the week ending May 15, US ethanol production averaged 1.11 million barrels per day, above last week's 1.08 million barrels per day and a year ago's 1.04 million barrels per day.
President Donald Trump's Jones Act waiver allowing fuel and crude barrels to be moved between US ports had a limited impact on high domestic gasoline prices amid higher freight rates and smaller shipment volumes, according to a Reuters analysis on Wednesday.In March, President Donald Trump eased restrictions under the century-old Jones Act, allowing foreign-flagged ships to transport crude and fuel between domestic ports to support coastal fuel supplies.The waiver aimed to increase shipments from Gulf Coast refiners to East and West Coast markets, where refinery shortages and limited pipeline access continue to tighten fuel availability.National gasoline prices climbed to $4.49 per gallon Tuesday from below $3 before the Iran conflict erupted in late February, while California averaged $6.11 per gallon, the analysis added, citing American Automobile Association data.According to the White House, data compiled since the first Jones Act waiver was granted indicate that more supply could reach US ports more quickly. Administration officials are reportedly happy with the waiver's results and have conveyed to the oil industry that future extensions may be granted, sources told Reuters.Federal figures showed Valero (VLO) and Phillips 66 (PSX) used the exemptions about 50 times during the first two months, transporting 2.6 million barrels of crude alongside 7.5 million barrels of refined fuels.Because disruptions around the Strait of Hormuz pushed tanker rates sharply higher, the waiver delivered only modest shipping savings while transported volumes remained small compared with nationwide fuel demand.University of Chicago energy policy professor Ryan Kellogg said that unusually high freight costs and a shortage of available international tankers made it difficult to secure vessels.American Maritime Partnership President Jennifer Carpenter said the waiver failed to "lower prices at the pump, and materially increase the flow of product across the country."White House officials viewed the waiver positively after additional fuel cargoes reached domestic ports faster, while administration sources signaled openness to extending the measure if needed, according to the analysis.Over 60% of gasoline and blendstock shipments transported under the waiver were delivered to California, totaling roughly 3 million barrels, or about 2.1 million gallons per day, federal data showed.Shipments into California, Alaska, Florida, South Carolina and Oregon combined averaged approximately 84,000 barrels daily, compared with total US fuel consumption near 8.75 million barrels per day, the analysis added.Argus data showed that foreign-flagged vessels moving fuel from the US Gulf Coast to the West Coast could reduce shipping costs by about 6.6 cents per gallon, or nearly 1% of California gasoline prices, while Jones Act tankers remained cheaper on East Coast routes due to strong Asian vessel demand.The waiver also altered shipping patterns, with one US tanker carrying Alaskan crude to South Korea in April for its first international voyage since 2014, while industry sources warned that foreign competition on domestic routes could tighten US tanker availability further.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
US natural gas futures maintained Wednesday's gains in after-hours trading as hotter-than-expected early-June weather forecasts reinforced expectations for stronger cooling demand and a tighter summer supply-demand balance.Both the July front-month Henry Hub contract and the continuous contract rose 2.59% to $3.088 per million British thermal units.The price rise came as updated 6-15 day forecasts trended warmer, encouraging short covering and shifting market attention away from lingering shoulder-season oversupply concerns toward rising summer demand expectations."The market is starting to look past shoulder-season looseness toward early summer demand," Gelber & Associates said.The Commodity Weather Group said above-normal temperatures are expected across the western half of the country during June 1-10.Aegis Hedging said the warming trend was led by the south-central US, where temperatures across the 15-day outlook increased by 21.6 degrees Fahrenheit. Cooling degree days are expected to soften briefly into the weekend before climbing toward 10 CDDs by the end of the forecast period.Power-sector consumption reflected stronger cooling-load expectations. Celsius Energy estimated Thursday's power burn at 26.1 Bcf, up 2.6 Bcf from the previous day and 3.1 Bcf above year-ago levels.Total demand, Barchart said, citing BNEF data, was estimated at 70.1 Bcf/d, up 6.4% from a year ago.The LNG sector remained steady despite ongoing maintenance work as BNEF data cited by Barchart showed LNG flows to US export terminals at 18.6 Bcf/d on Wednesday, up 200 million cubic feet per day from the prior day and 4.8% higher week on week.Gelber said dry gas production remains anchored near 110 Bcf/d, while Canadian imports provide a stable secondary supply of near 5 Bcf/d. BNEF data showed Lower-48 dry gas output at 109.8 Bcf/d on Wednesday, down 800 MMcf/d from the previous day but still 1.9% above year-earlier levels.Attention is now turning to Thursday's US Energy Information Administration storage report. Gelber estimates an injection of 90 Bcf, below the 101 Bcf build recorded in the comparable week last year. It said a smaller-than-year-ago build could reinforce expectations that early summer heat and resilient LNG demand are beginning to tighten balances heading into July.
A Russian tanker carrying up to 300,000 barrels of fuel was diverted from Cuba, dealing another setback to the island's worsening energy shortage, according to multiple media reports on Wednesday citing vessel-tracking data.Tracking data from Kpler and LSEG showed the tanker Universal changed its destination from Cuba to "for order," maritime jargon for a vessel awaiting directions, after spending weeks idling in the Sargasso Sea.The Russia-flagged vessel had loaded diesel cargo at a Russian port and was expected to help ease fuel shortages that continue to strain Cuba's fragile electricity network.Cuba has struggled to secure fresh oil shipments after the US tightened pressure on countries supplying fuel to Havana and restricted Venezuelan crude exports to the island following the removal of President Nicolas Maduro in January.