Gasoline Gains as Refinery Shutdowns Keep Inventories Tight
Gasoline gained, outperforming heating oil and crude, on speculation that refinery closures in North America and Europe may make summer-blend gasoline inventories tight along the U.S. East Coast.
Futures rose after the U.K.’s Coryton refinery stopped operating, at least the sixth plant European plant to close since the start of 2011. Hovensa LLC’s St. Croix refinery in the U.S. Virgin Islands is shut and Monroe Energy LLC isn’t expected to open the idled Trainer, Pennsylvania, refinery in time for the summer driving season.
Reformulated gasoline, or RBOB, in New York Harbor “is tight on the shutdown of Trainer and Hovensa,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “It’s difficult to make up that shortfall from Europe. It’s expensive to make and not everyone can make it.”
July-delivery gasoline rose 2.83 cents, or 1.1 percent, to $2.5982 a gallon at 9:51 a.m. on the New York Mercantile Exchange. The contract is for reformulated blendstock, or RBOB.
Sunoco Inc. shut a vacuum tower associated with the 137 crude unit for repairs at the 355,000-barrel-a-day Philadelphia refinery on June 20, a notice to city regulators shows.
The closing of Coryton and other plants in Europe has reduced imports into New York Harbor, the delivery point for the Nymex futures contract. U.S. East Coast gasoline imports have averaged 612,000 barrels a day so far this year, down from 789,000 barrels a day during the same period in 2011.
“Oil is down because Tropical Storm Debby is going to steer clear of offshore and refining operations on the Gulf Coast and because there’s more discouraging news out of Europe,” Lipow said.
Heating oil for July delivery fell 1.91 cents, or 0.8 percent, to $2.5146 a gallon on the exchange. Prices touched $2.51, the lowest intraday level for the front-month contract since Jan. 10, 2011. Crude oil for August delivery on the Nymex lost $1.40 to $78.36.
Regular gasoline at the pump, averaged nationwide, fell 0.9 cent to $3.411 a gallon yesterday, according to AAA. It was the lowest price since Jan. 27.
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