Midwest Diesel at One-Month High as Tulsa Refinery Shuts Units

U.S. Midwest diesel fuel strengthened to the highest premium in a month relative to futures after HollyFrontier Corp. (HFC) shut units at its Tulsa, Oklahoma, refinery.

The premium for ultra-low-sulfur diesel fuel in Group 3 swelled 0.05 cent to 2.75 cents a gallon above futures on the New York Mercantile Exchange at 4:25 p.m., the strongest level since July 17. Group 3 includes states north from Tulsa to Minnesota and North Dakota.

The spread widened after filing with regulators showed HollyFrontier’s 70,300-barrel-a-day Tulsa East refinery shut units after a power failure yesterday. The company’s Tulsa West refinery reported a malfunction on the same day, according to the notice.

The refineries primarily process sweet crude oils and serves the markets in the midcontinental part of the U.S. known as Group 3, according to the company’s website.

Ultra-low-sulfur diesel in Chicago gained 1.25 cents, narrowing its discount to futures to 5.75 cents a gallon. The 3-2-1 crack spread in Chicago, a rough measure of refining margins for gasoline and diesel fuel based on West Texas Intermediate oil in Cushing, Oklahoma, advanced 51 cents to $14.39 a barrel. The same spread for Group 3 dropped 8 cents to $17.82.

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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