Chicago Gasoline Tumbles to Three-Week Low as Supply Increases
Chicago gasoline fell to the lowest level in three weeks after shippers moved fuel from the Gulf Coast into the region as prices surged earlier in the month.
Gasoline at the hub fell for a sixth straight day. Chicago differentials reached the highest level in a year last week, and shippers booked space on pipelines to bring fuel north, Lewis Adam, president of ADMO Energy LLC, a supply consultant in Kansas City, Missouri, said in a note to clients.
“Now those guys are paying the price,” he said.
The discount for conventional, 87-octane gasoline in Chicago weakened 1.25 cents to 9 cents a gallon versus futures traded on the New York Mercantile Exchange at 2:33 p.m. in New York. That’s widest discount since May 24. Prompt delivery dropped 3.13 cents to $2.5521 a gallon today.
The fuel traded at a premium of 37.5 cents to New York futures on June 11.
The rally peaked as BP Plc (BP/) restarted crude unit 11A at its Whiting refinery in Indiana. The company planned to start the unit a week after part of it malfunctioned, a person familiar with operations at the plant said on June 7.
Unleaded gasoline in the Midwest, or Group 3, narrowed its premium 7.5 cents to 16.5 cents a gallon. It has declined for three consecutive days.
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