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Gulf Coast Refined Products Gain With Enbridge Pipeline Shut

Gulf Coast gasoline and diesel strengthened amid speculation that traders are shipping the product to the Midwest, where refiners have shut equipment for repairs and Enbridge Inc. (ENB) closed a crude oil pipeline.

A unit at Citgo Petroleum Corp.’s Lemont plant was shut because of an upset, according to state filing yesterday. Enbridge halted transmission on Line 14 on July 27 after the pipe spilled an estimated 1,200 barrels of oil in Wisconsin.

“The longer it lasts the more likely run-cuts become,” Steve Mosby, vice president of supply consultant ADMO Energy LLC in Kansas City, Missouri, said in an electronic message. Gulf prices have become stronger, he said.

The discount for conventional, 87-octane gasoline in the Gulf Coast narrowed 1.05 cents to 6.2 cents a gallon versus futures traded on the New York Mercantile Exchange at 2:15 p.m., according to Bloomberg. Prompt delivery slipped 2.77 cents to $2.7182 a gallon.

A fluid catalytic cracking unit at the Lemont refinery is undergoing maintenance that should be finished within the week, Citgo said in an e-mailed statement yesterday. BP Plc shut a coker at its Whiting refinery in Indiana to repair damage from a fire July 23 that could take as long as four weeks to repair, a person with knowledge of operations at the plant said July 27.

The tariff to ship oil products on the Explorer pipeline, which runs from Lake Charles, Louisiana, through Tulsa, Oklahoma, to Hammond, Indiana, is 4.73 cents a gallon, according to a regulatory filing.

The premium for ultra-low-sulfur diesel at the Gulf Coast hub gained 1.35 cents to 6.7 cents a gallon. It’s the highest level since July 18.

Enbridge Inc. can’t resume transporting oil on Line 14 until it submits a restart plan to the U.S. Pipeline and Hazardous Materials Safety Administration for approval. The 317,600-barrel-a-day pipe runs from Superior, Wisconsin, to the Griffith-Hartsdale area in Indiana.

The premium for conventional gasoline in Chicago rose 2.5 cents to 26 cents a gallon. It is the highest level since June 12.

To contact the reporter on this story: Paul Burkhardt in New York at pburkhardt@bloomberg.net.

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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