U.S. Gulf Coast Diesel Strengthens as Valero Starts McKee Work

The premium for ultra-low-sulfur diesel fuel in the Gulf Coast widened for the first time in a week as Valero Energy Corp. (VLO) started work on a hydrocracker at its McKee refinery in Texas.

The turnaround on the 30,000-barrel-a-day hydrocracker is scheduled to last 24 days, the company said in February.

The premium for ultra-low-sulfur diesel on the Gulf Coast versus heating oil futures traded on the New York Mercantile Exchange widened 0.63 cent to 3.38 cents a gallon at 2:14 p.m. in New York. The premium last gained on March 25. Prompt delivery rose 0.75 cent to $3.1583 a gallon.

The discount for conventional, 87-octane gasoline in New York Harbor was unchanged at 11.5 cents below gasoline futures on the exchange. Prompt delivery rose 2.72 cents to $3.0198 a gallon.

The fuel reversed an earlier 1.75-cent gain as Sunoco Inc. (SUN) was said to plan the start of a fluid catalytic cracker and a crude unit at its Philadelphia refinery next week, according to three people with knowledge of the matter.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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