Diesel Prices Retreat After Early-Week Surge as Supply Tightness Keeps Basis Elevated

Market TalkWed, Jul 09, 2025
Diesel Prices Retreat After Early-Week Surge as Supply Tightness Keeps Basis Elevated

The shine is coming off diesel prices with August ULSD down 3.5 cents in the early going after gaining 7 cents to start the week, while RBOB and WTI futures hover near break even levels.

While ULSD futures are giving back some of their recent gains in both outright values and time/crack spreads, basis differentials on both the East and West Coast are holding double digit premiums suggesting the tight physical supplies in those regions haven’t yet eased.

The EPA held a virtual meeting Tuesday to hear testimony on its proposed RFS rules. The biofuel industry both applauded the proposal while still asking for additional mandated volumes on ethanol and cellulosic fuels, while the record-keeping requirements of the new 50% import value was also a topic of discussion.

Marathon’s 133mb/day refinery in El Paso was knocked offline by a power outage Tuesday afternoon, according to a filing with the TCEQ. The company briefly suspended unbranded sales that their loading rack following the event, but turned them back on later in the evening suggesting the plant was able to resume operations.

Exxon’s 588mb/day Baytown TX refinery reported an upset in a light oil treater unit that caused brief flaring, but it does not appear that other operations were impacted by that event.

That didn’t take long: Just 1 day after a winning bidder was announced in the latest Citgo auction, bondholders and other bidders are already filing legal challenges, which could mean we’ll end up with another do-over like we saw this past year.

Diesel Prices Retreat After Early-Week Surge as Supply Tightness Keeps Basis Elevated