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Los Angeles Diesel Drops as Phillips 66 Plant Said to Start Unit

Spot diesel in Los Angeles fell against futures as Phillips 66 (PSX) was said to be starting a hydrocracker at its Los Angeles-area refinery after finishing planned maintenance.

The 139,000-barrel-a-day plant will take about a week to return the unit, which makes oil products such as gasoline and fuel oil, to normal operations, a person familiar with the work said today. The hydrocracker was scheduled to be shut about Oct. 16 for a maintenance turnaround, two people with knowledge of the schedule said last month.

Dennis Nuss, a Phillips 66 spokesman at the company’s headquarters in Houston, declined to comment on the hydrocracker’s startup. “Planned maintenance is still under way” at the refinery, he said by telephone today.

California-grade, or CARB, diesel in Los Angeles fell 1.5 cents to 4 cents a gallon over heating oil futures traded on the New York Mercantile Exchange at 4:11 p.m. East Coast time, data compiled by Bloomberg show. The same fuel in San Francisco jumped 5 cents to a premium of 2.5 cents a gallon.

State-blend gasoline, or Carbob, in Los Angeles climbed 0.5 cent to 10 cents a gallon over Nymex gasoline futures.

Valero Energy Corp. (VLO) reported flaring at the Wilmington refinery in Southern California over the weekend because of “process and storage issues,” a state regulatory filing shows. No units were shut, and there was no impact on production, Bill Day, a spokesman at the company’s headquarters in San Antonio, said by e-mail yesterday.

Carbob in San Francisco slipped 0.5 cent to reach parity with futures.

Conventional 84 sub-octane gasoline to be blended with ethanol in Portland, Oregon, dropped 2.5 cents to 19 cents a gallon under gasoline futures, the biggest discount for the fuel since Nov. 2. Low-sulfur diesel in Portland also fell 1 cent to 6.5 cents a gallon over heating oil futures.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

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

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