Chicago Gasoline Falls to 1-Week Low on Exxon Joliet

Chicago gasoline weakened to the lowest level in a week versus New York futures as Exxon Mobil Corp. (XOM) completed maintenance at a Joliet, Illinois, refinery.

Conventional, 85-octane gasoline, or CBOB, in Chicago fell 10 cents to a premium of 50 cents a gallon above futures traded the New York Mercantile Exchange as of 4:15 p.m., according to data compiled by Bloomberg. That was the smallest differential since May 30.

The spread narrowed for a fifth consecutive day after Exxon said it completed a refinery-wide turnaround at the 238,000-barrel-a-day Joliet plant, the fifth-largest in the U.S. Midwest. The work, which began April 14, shut all operating units.

“That’s what has us coming off today,” Steve Mosby, vice president of supply consultant ADMO Energy LLC in Kansas City, Missouri, said in a phone interview. “Exxon isn’t out there buying, so we seem to be cooling off. Joliet is also a large plant and it’s going to put a lot of material out there.”

Gasoline inventories in the U.S. Midwest, or PADD 2, were 48.4 million barrels in the week ended May 31, after falling to 4.76, the the lowest level since Nov. 30, earlier in the month, according to U.S. Energy Information Administration data.

It may take awhile for Joliet’s output to reach the market, Mosby said. BP Plc (BP/) said on June 6 that it plans to restart this month its Whiting, Indiana, refinery’s largest crude unit.

Chicago-Gulf

The return of oil refineries in the Midwest may also spur exports of gasoline and diesel from the U.S. Gulf Coast, according to Fotis Giannakoulis, a New York-based analyst at Morgan Stanley. Plant restarts will boost Midwest capacity by more than 300,000 barrels a day, he said in an e-mailed report.

The 3-2-1 crack spread in Chicago, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, dropped $3.05 to $40.87 a barrel.

Conventional, 85-octane gasoline, or CBOB, on the Gulf Coast strengthened 3.5 cents to a discount of 11.75 cents a gallon versus Nymex futures at 3:59 p.m., the strongest level since Feb. 27. Reformulated gasoline, or RBOB, advanced 1.5 cents to 1.5 cents a gallon above futures.

The differentials widened after Marathon Petroleum Corp. (MPC) said a fluid catalytic cracker remained shut at its 81,500-barrel-a-day Texas City, Texas, refinery following a leak on June 7. Crude units were brought back online at the plant over the weekend, said Jamal Kheiry, a company spokesman.

Hydrocracker work at Valero Energy Corp. (VLO)’s Port Arthur, Texas, refinery also continued today, said Bill Day, a company spokesman based in San Antonio.

The 3-2-1 crack spread on the Gulf, based on WTI, gained 39 cents to $21.24 a barrel, while the same spread for Light Louisiana Sweet oil increased 69 cents to $12.04 a barrel.

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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