Gulf Gasoline Jums to 6-Week High on Port Arthur Outages

Spot gasoline in the Gulf Coast strengthened to the highest level against futures in six weeks after a power failure shut units at refineries in the Port Arthur, Texas, area.

Motiva Enterprises LLC’s plant experienced flaring and upsets at several units following yesterday’s interruption, while Valero Energy Corp. (VLO) was restarting a crude unit and a hydrocracker today, according to the companies. Total Petrochemicals USA Inc.’s Port Arthur plant reported a fire as well as unit upsets.

The discount for conventional, 85-octane gasoline, or CBOB, in the Gulf narrowed 5.5 cents to 15.5 cents a gallon versus futures on the New York Mercantile Exchange at 3:58 p.m., the strongest differential since Feb. 27, according to data compiled by Bloomberg.

Reformulated gasoline increased 3.75 cents to a premium of 3.75 cents a gallon, the biggest gain since September, while conventional, 87-octane gasoline strengthened 4.75 cents to a discount of 11.5 cents a gallon.

Electricity provided by Entergy Corp. (ETR) was restored yesterday to the Port Arthur refineries, which account for 1.08 million barrels a day of refining capacity on the Gulf Coast. The cause of the failure will be under investigation in coming days, said David Caplan, a company spokesman based near Houston.

The interruption may mean a drop in Gulf Coast gasoline supplies, which the Energy Information Administration said fell 77,000 barrels to 74.2 million in the week ended April 5. Distillate inventories declined 632,000 barrels to 35.5 million barrels, said the Energy Department’s statistical arm.

Chicago Spread

Ultra-low-sulfur diesel fuel on the Gulf increased 0.5 cent to 1.25 cents a gallon below Nymex futures.

The 3-2-1 crack spread on the Gulf, a rough measure of refining margins based on West Texas Intermediate in Cushing, Oklahoma, gained $2.15 to $24.72 a barrel, the highest level since April 1. The same spread for Light Louisiana Sweet oil increased $1.70 to $10.22 a barrel, the third consecutive daily advance, according to data compiled by Bloomberg.

Refining margins in Chicago, based on WTI, rose $1.38 to $26.47 a barrel. Gasoline in the region traded 5.44 cents above the fuel on the Gulf Coast.

Conventional gasoline, or CBOB, in Chicago strengthened 2.25 cents to 10 cents a gallon below Nymex futures after Exxon Mobil Corp. (XOM) shut its 238,000-barrel-a-day Joliet, Illinois refinery for planned maintenance.

The closing, which includes all of its operating units, will last “several weeks,’ said Tricia Simpson, a company spokeswoman based at the plant.

Ultra-low-sulfur diesel in Chicago increased 0.25 cent to trade at a premium of 8.5 cents a gallon.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

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

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