Gulf Diesel Gains as Venezuela Fire Spurs Export Speculation

U.S. Gulf Coast diesel rose for a fourth day as Petroleos de Venezuela SA worked to extinguish a tank fire at its El Palito refinery, raising speculation of greater demand for U.S. exports.

Venezuelan President Hugo Chavez said on state television yesterday that a second fire at the 130,000-barrel a day plant is under control. Before the flames erupted at the storage tanks, PDVSA was working to restart the main processing units at its Amuay refinery in western Venezuela after a gas leak caused an explosion on Aug. 25.

The premium for ultra-low-sulfur diesel in the Gulf Coast rose 2 cents to 5.75 cents a gallon versus heating oil futures traded on the New York Mercantile Exchange at 3:48 p.m. Prompt delivery rose 4.91 cents to $3.1837.

U.S. exports of refined products to Venezuela rose to 103,000 barrels a day in June, the highest level of any month on record, according to the Energy Department. Product exports to the South American country have averaged 48,500 barrels a day this year, up from the previous record of 32,000 a day in 2011.

To contact the reporter on this story: Joshua Falk in New York at jfalk19@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net