The Group 3 ULSD differential plummeted Tuesday, down 2.45 cents/gal to NYMEX November ULSD futures minus 9.25 cents/gal -- the lowest level the differential has been since April when the ULSD contract succeeded the former heating oil contract as the basis.
Group 3's differential has sharply decreased since Tuesday of last week, dropping 6.45 cents/gal as supply is plentiful from the Chicago region and agricultural demand has been weaker than expected.
Group 3 is typically at a 4 cents/gal premium over the Gulf Coast but is now at a 3.30 cents/gal discount, the biggest the discount has been since January 24, when it was 3.40 cents/gal.
With the arbitrage to the Group 3 closed, Gulf Coast ULSD fell 35 points/gal to minus 5.95 cents/gal on deadline day for a Colonial Pipeline shipping cycle.
At 3:15 pm EDT, Platts assessed the NYMEX November ULSD futures contract at $2.9981/gal, down 1.54 cents/gal.