Los Angeles gasoline jumped to the highest level in almost three months after stockpiles of the motor fuel sank amid a series of upsets at refineries.
The fuel’s premium to futures widened after a state Energy Commission report showed California-blend gasoline, or Carbob, inventories slid for the first time in four weeks, tumbling 3.8 percent to 6.72 million barrels in the week ended Jan. 24. Chevron Corp. (CVX)’s El Segundo plant and Phillips 66’s Los Angeles- area refinery cut rates after upsets this week, said people with knowledge of operations at the sites.
California-blend gasoline, or Carbob, in Los Angeles jumped by 6.25 cents to a premium of 12.5 cents a gallon over futures traded on the New York Mercantile Exchange, the highest level since Nov. 5, according to data compiled by Bloomberg at 2:39 p.m. East Coast time.
The premium for Los Angeles Carbob has more than doubled in the past week on speculation that the equipment failures will cut supplies in the market at a time when U.S. West Coast refiners including Tesoro Corp. (TSO) and Exxon Mobil Corp. (XOM) are scheduled to perform planned repairs.
Exxon’s 150,000-barrel-a-day Torrance plant in Southern California will start repairs on equipment including a coker in late February, at least week ahead of schedule, a person familiar with the work said Jan. 27, asking not to be identified because the information isn’t public.
Tesoro’s 97,000-barrel-a-day Wilmington plant is also performing planned work on a hydrocracker, a person with knowledge of the schedule said.
Chevron’s 279,000-barrel-a-day El Segundo complex, the largest single refinery in California, shut the No. 4 crude unit following a Jan. 25 power failure and restored it to planned rates this week, according to a person familiar with operations there. Phillips 66 (PSX)’s Los Angeles plant cut rates at the fluid catalytic cracker as it worked to fix a bad pressure indicator, a person with knowledge of the upset said Jan. 28.
Retail gasoline in California was unchanged at $3.585 a gallon, according to Heathrow, Florida-based AAA.
The 3-2-1 crack spread, assuming two barrels of Carbob and one barrel of CARB diesel in Los Angeles, is refined out of three barrels of Alaska North Slope crude, widened $1.19 to $14.83 a barrel at 4:03 p.m. New York time, data compiled by Bloomberg show. The margin, a rough measure of refining profitability in the region, is the highest since Nov. 8.
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