MARKETWIRE ALERTS
Barani Krishnan
DTN Refined Fuels Market Reporter
MARKETWIRE ALERTS
MarketWire Afternoon News Sept 8:
Updated at 5:00 PM ET
HEADLINES:
-- Midwest CBOB Mixed as Pipeline Markets Lead Gains
-- Texas to Fund Plugging of Low-Producing Oil and Gas Wells
-- DOE: SPR Dips 1.2 million bbl in September 4 Wk to November 1982 Low
-- Pemex Deer Park Reports Flaring After Power Loss
-- Midwest Supply Tightens on Fall Maintenance, Harvest Demand
NEWS
Texas to Fund Plugging of Low-Producing Oil and Gas Wells
Texas is accepting applications from marginal conventional well owners and
operators who are interested in permanently plugging and abandoning their oil
and/or gas wells, the Texas Commission on Environmental Quality announced
Tuesday (9/8).
The Texas Voluntary Marginal Conventional Well Plugging Program (TxMCW) has
more than $100 million in available funding, sourced through the federal
Inflation Reduction Act's Methane Emissions Reduction Program.
Individuals, corporations, state and local governments, and other legal
entities are eligible to apply. To qualify, wells must be located onshore in
Texas, must be vertical, and must produce no more than 15 barrels of oil
equivalent per day or 90 thousand cubic feet of gas per day annually. Wells
cannot have been previously plugged and must have a known owner or operator.
Interested applicants are encouraged to review the posted
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05%7C02%7Cmaria.garcia%40dtn.com%7C3d8b086f20fe4866010b08df0ddd83db%7Cd945da26f0
7f451496e79b8f78a743d0%7C0%7C0%7C639244917288504524%7CUnknown%7CTWFpbGZsb3d8eyJF
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ved=0 for full eligibility guidelines and submission instructions.
Applications will be accepted until 5:00 p.m. CST on Nov. 9, 2026. Wells
will be selected for participation on a competitive basis.
Midwest CBOB Mixed as Pipeline Markets Lead Gains
CBOB spot basis diverged across the Midwest on Tuesday (9/8), with regional
pipelines leading the gains as traders adjusted cash values selectively over
concerns of a supply squeeze and in alignment with rallying gasoline futures.
The Buckeye Complex and Wolverine pipelines both traded at parity with the
October NYMEX RBOB contract, narrowing their discounts by 35cts and 3.5cts
gallon respectively.
The discount for Chicago CBOB narrowed by 4.5cts as it traded at 3.5cts
gallon below the futures benchmark.
Group 3 CBOB, however, saw its premium slip by 3cts to 15cts over the
October RBOB contract.
The varying moves in Midwest cash gasoline came as the October contract
added $0.0376, or 1.17%, in NYMEX trading to settle at $3.2525 gallon.
Midwest fuel markets have been navigating supply uncertainty since an August
17 fire at Explorer Pipeline's Glenpool tank farm in Tulsa, Oklahoma. With no
firm timeline for restoring full northbound shipments along the 1,830-mile
system, regional fuel traders have been relying heavily on benchmark futures
for price direction.
Pemex Deer Park Reports Flaring After Power Loss
Pemex's 312,500 bpd Deer Park refinery in Texas reported a flaring event
after heavy storms caused a loss of power to a substation, resulting in
compressor trips, according to a filing with the Texas Commission on
Environmental Quality (TCEQ).
The event occurred Sunday (9/6) between 11:05 a.m. and 5:55 p.m. CT, with
flaring reported at the refinery's North and West Property flares.
The power loss initially affected pumps supporting Compressor C36200, which
tripped while operators were switching to Compressor C36201. Later,
power-related pump issues caused rising levels in a knockout pot and
subsequently tripped Compressor C36201, resulting in additional flaring.
Estimated sulfur dioxide emissions totaled 1,194.8 pounds from the North
Property Flare and 2,210 pounds from the West Property Flare. The filing
reported the event exceeded the reportable quantity for sulfur dioxide.
Operators restarted the compressor to minimize flaring, according to the
filing.
The Deer Park refinery primarily produces gasoline, diesel and jet fuel.
DTN reached out to Pemex for additional details but did not get an immediate
response.
Midwest Supply Tightens on Fall Maintenance, Harvest Demand
Midwest fuel supply faces sustained downward pressure as refiners schedule
maintenance work in the coming weeks at plants already running near capacity to
capture strong crack margins and maximize output to undersupplied markets.
High demand during the harvest season is also expected to add to the fuel
tightening.
PADD 2 refinery utilization has hovered near record seasonal highs heading
into September, with facilities running flat out to produce gasoline and
distillates. The sustained high run rates come as Midwest refiners take on a
new responsibility -- directing products on the newly-expanded Buckeye pipeline
to serve depleted East Coast markets.
"U.S. refining utilization is at 98%, so refineries are running full out at
the same time that we're seeing record-low inventories of both gasoline and
diesel fuel for this time of year," said Andy Lipow, president of Lipow Oil
Associates in Houston.
The physical market pressure is underscored by Group 3 CBOB cash prices
surging 42.13ct last week to average at $3.1023 gallon, while Chicago ULSD
rallied 51.35cts to $4.5292 as regional buyers scrambled for prompt barrels
ahead of autumn refinery turnarounds.
Scheduled turnarounds at Midcontinent refineries -- including routine unit
maintenance at BP's 440,000 bpd Whiting, Indiana facility and operational
checks at ExxonMobil's 251,000 bpd Joliet, Illinois refinery -- could add to
inventory stress across the region.
Turnaround work at BP's Whiting refinery is typically slated for September,
market tracking estimates show, though the facility is currently navigating an
ongoing labor lockout.
Joliet experienced a weather-related power outage and slow ramp-up that kept
its 251,000 bpd capacity constrained heading into late summer, and operational
buffers tight ahead of the fall season.
Aside from BP and ExxonMobil, PBF Energy has a Fluid Catalytic Cracker (FCC)
overhaul due in the first half of 2027 at its 180,000 bpd Toledo, Ohio
refinery. The maintenance was originally scheduled for the fourth quarter of
this year. However, unplanned unit repairs at Toledo earlier this year prompted
PBF to defer the work, extending the run-time for its FCC complex.
Refiners generally attempt to defer turnaround work while refining margins
remain elevated. But after months of operating at 97% or higher across the
broader U.S. refining complex, mechanical wear makes shutdowns unavoidable.
The upcoming reduction in regional production coincides with the onset of
Midwest agricultural harvest season, which historically drives a sharp seasonal
spike in off-road diesel and ULSD consumption across the farm belt.
"The issue is really supply, not stress for refiners -- who are making lots
of money," Lipow told DTN. "There's little in the way of a supply cushion, if
we get additional unscheduled outages in the refining sector."
While PADD 2 distillate inventories currently stand at a relatively healthy
28.8 million bbl --compared with the record low 19.3 million bbl in PADD 1
--Midwest motor gasoline stocks remain near multi-year seasonal lows.
If regional turnaround downtime accelerates while farm-belt agricultural
demand peaks, internal PADD 2 supply reserves could draw down rapidly. Sudden
tightening would also likely shut off eastbound flows on the Buckeye, forcing
Chicago and Group 3 spot basis differentials to flip from steep discounts to
strong premiums over NYMEX to keep barrels locked inside the Midwest.
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