Gasoline and diesel in the U.S. Midwest slipped for a second day on speculation that as supply constraints ease on the East Coast less product will be diverted from the Chicago region and as a refinery in the region started.
Stockpiles of gasoline on the East Coast, known as PADD 1, gained 1 million barrels to 46.1 million last week, Energy Department data showed. That’s the first inventory build since Hurricane Sandy made landfall on the East Coast, shutting oil refineries, terminals and gas stations.
Conventional gasoline for ethanol blending in Chicago, or CBOB, retreated 1 cent to a 4.50-cent discount to gasoline futures on the New York Mercantile Exchange at 2:34 p.m., according to data compiled by Bloomberg.
“Supply concerns about the East Coast have been moderated so there’s less supply being sucked out of Chicago,” Lewis Adam, president of ADMO Energy LLC, a supply consultant in Kansas City, Missouri, said in a phone interview today. “It’s about a lessening of pressure coming out of New York and the East Coast.”
CVR Energy Inc. (CVI)’s Wynnewood refinery in Oklahoma began starting units today after completing planned maintenance that began in September. That may also be contributing to the downward pressure the Midwest, known as PADD 2, Adam said.
Conventional, 87-octane gasoline in the Group 3, or Midcontinent, market, which stretches from Oklahoma to Minnesota, declined 5.5 cents to trade at a discount of 18 cents a gallon. Ultra-low-sulfur diesel slid 0.88 cent to 3.25 cents over heating oil futures.
Processing is “starting up with all sweet crude” and the Wynnewood refinery has “a reduced production rate,” according to a filing with the National Response Center yesterday. The refinery has a capacity of 70,000 barrels a day.
Gasoline in New York Harbor retreated as Phillips 66 (PSX)’s Bayway refinery returned to normal operations for the first time since Hurricane Sandy shut down the plant Oct. 29.
The 238,000-barrel-a-day plant, which is the largest single refinery in the New York region, spilled about 185 barrels of oil as a result of the storm, Phillips 66 said today in a statement on its website.
CBOB in New York slipped 0.25 cent to a premium of 3.5 cents versus futures at 2:19 p.m. Ultra-low-sulfur diesel dropped 0.5 cent to 20 cents over futures.
To contact the reporter on this story: Christine Harvey in New York at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org