U.S. Midcontinent gasoline rose for a second day relative to futures, rebounding from an all-time low, while a government report showed area refineries cut motor fuel production for the first time in three weeks.
Conventional, 87-octane gasoline in the Midcontinent, or Group 3 region, added 4.75 cents to a discount of 36.5 cents a gallon versus futures on the New York Mercantile Exchange at 2:43 p.m., according to data compiled by Bloomberg. Prices slumped to a discount of 45.5 cents on Dec. 3, the lowest level in data going back to January 1990.
The market is reversing because “it’s feeling like it has bottomed,” said Steve Mosby, vice president of Admo Energy LLC, a supply consultant in Kansas City, Missouri.
Production of gasoline in the Midwest, the region known as PADD 2 that includes the Midcontinent, dropped 27,000 barrels to 2.55 million barrels a day in the week ended Dec. 13, a two-week low, according to data compiled by the Energy Information Administration. Inputs of crude and other feedstock by refiners in the area fell 126,000 barrels to 3.57 million, the data showed.
The 3-2-1 crack spread in the Midcontinent, a rough measure of refining margins based on West Texas Intermediate gained $2.78 to $8.49 a barrel, the biggest jump since May 15, according to data compiled by Bloomberg.
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