San Francisco Diesel Falls Most Since January on Valero Startup

The premium for spot diesel in San Francisco weakened by the most against heating oil futures since January as Valero Energy Corp. (VLO)’s Benicia refinery restored production at its hydrocracker.

The Benicia plant in Northern California is returning the 36,000-barrel-a-day hydrocracker to planned rates after a 10-day outage, Bill Day, a spokesman at Valero’s headquarters in San Antonio, said by e-mail today. The unit, which converts heavy hydrocarbons into lighter fuels, was shut to perform repairs on a hydrogen plant.

California-blend, or CARB, diesel in San Francisco dropped 4.5 cents against heating oil futures traded on the New York Mercantile Exchange to a premium of 11 cents a gallon at 3:59 p.m. New York time, data compiled by Bloomberg show. That’s the fuel’s biggest drop since Jan. 31 and the lowest level in a week. Prompt delivery fell 4.08 cents to $3.0063 a gallon.

CARB diesel in Los Angeles strengthened 1 cent against heating oil futures to a discount of 0.75 cent a gallon.

CARB diesel in San Francisco narrowed its premium versus the fuel in Los Angeles by 5.5 cents to 11.75 cents a gallon. San Francisco diesel rose yesterday to its highest level ever above Los Angeles, which began trading for April delivery.

California-blend gasoline, or Carbob, in San Francisco gained 5.5 cents against Nymex gasoline futures to a discount of 8 cents a gallon. The same fuel in Los Angeles gained 5.5 cents to 7 cents a gallon under futures.

Carbob Stockpiles

Carbob stockpiles tumbled 6.6 percent in the week ended March 15 to 5.83 million barrels, the lowest level since Nov. 23, the state Energy Commission said on its website late yesterday.

In Portland, Oregon, conventional, 84-octane gasoline advanced 2.25 cents versus gasoline futures to a discount of 26 cents a gallon. Low-sulfur diesel there strengthened for the first time in a week, increasing 0.5 cent to premium of 4.25 cents a gallon against heating oil futures.

The 3-2-1 crack spread of Alaska North Slope crude, Carbob in Los Angeles and CARB diesel in Los Angeles gained a second day, increasing $1.009 to $16.595 a barrel. The spread, a measure of refining profitability, reached a one-year low of $3.86 a barrel in December.

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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