Gulf Gasoline Drops as Flood Impact ‘Reduced’ on Open Spillway
Gulf Coast gasoline slipped after gates were opened on the Morganza floodway in Louisiana as a measure to reduce pressure on the Mississippi River system, whose swelling water levels threaten refinery operations.
Exxon Mobil Corp. is operating after shutting docks at its Baton Rouge refinery, Kevin Allexon, a company spokesman, said in an e-mailed statement. Placid Refining Company LLC in Port Allen made some adjustments to barge traffic and is also operating normally, Rafael Bermudez, an outside spokesman, said in an e-mail.
“With the opening of the floodgates, the major risk of impact to the big refineries on the river has reduced,” JPMorgan Chase & Co. analysts led by Lawrence Eagles said today in a note to clients.
The discount for conventional, 87-octane gasoline in the Gulf Coast widened 3.62 cents to 5.75 cents a gallon at 1:05 p.m., according to data compiled by Bloomberg. The fuel was at a premium of 5 cents May 9. Prompt delivery slipped 16.15 cents to $2.8917.
Placid’s 58,000-barrel-a-day refinery receives more than 97 percent of its crude supply by pipeline and most of the balance by truck, and the refinery’s other miscellaneous feedstocks are delivered primarily by truck, Bermudez said.
The diversion of water to the Atchafalaya River basin has the potential to impact only one small refinery, which has been preparing for floodwaters, Eagles wrote.
Alon USA Energy Inc. (ALJ) said levees should protect its 83,000- barrel-a-day refinery near Krotz Springs, Louisiana, from flooding from the Atchafalaya River.
Regular gasoline in New York Harbor widened its discount 1.13 cents to 4.13 cents a gallon.
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