San Francisco Diesel at High as Tesoro Said to Cut Output
Spot diesel in San Francisco advanced to a record premium against futures after Tesoro Corp. (TSO)’s Golden Eagle refinery in Northern California was said to cut production of the fuel following a compressor breakdown.
Tesoro’s 170,000-barrel-a-day Golden Eagle plant curbed diesel production after one of two compressors at a hydrodesulfurization unit shut following an equipment failure, a person with direct knowledge of the incident said earlier today. The No. 3 HDS unit will run at reduced rates until new parts can be installed in the damaged compressor, the person said.
California-blend, or CARB, diesel in San Francisco gained 1.5 cents to 27.5 cents a gallon above heating oil futures traded on the New York Mercantile Exchange at 4:08 p.m. East Coast time, data compiled by Bloomberg show. That’s the largest premium for the fuel since Bloomberg began compiling data in November 2007.
Tina Barbee, a Tesoro spokeswoman at the company’s headquarters in San Antonio, said the Golden Eagle refinery is performing maintenance and expects to “meet all product supply commitments.” She declined in an e-mail to comment on the compressor.
CARB diesel in Los Angeles jumped 2.75 cents to 19.75 cents a gallon above futures, the highest since Aug. 14.
California-blend distillate supplies tumbled 17 percent to 2.18 million barrels in the week ended Aug. 10, and production of the fuel dropped 30 percent, data compiled by the state Energy Commission show.
Chevron Corp. (CVX) has been running process units at the 240,000-barrel-a-day Richmond refinery, the largest in Northern California, at reduced rates following an Aug. 6 blaze that shut the plant’s only crude unit, a person with direct knowledge of operations there said Aug. 8.
California-blend gasoline in San Francisco slipped 1.5 cents to a 7-cent-a-gallon premium to Nymex gasoline futures. That’s the smallest difference since the fire in Richmond.
California-blend gasoline in Los Angeles was unchanged at a 2-cent premium to futures.
Conventional, 87-octane gasoline in Portland, Oregon, dropped 4.5 cents to 14 cents a gallon above gasoline futures. Low-sulfur diesel in Portland also fell 3 cents to a premium of 37 cents a gallon against heating oil futures.
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