Gasoline Heads for Biggest Weekly Gain Since December on Repairs

Gasoline futures headed for the biggest gain in seven weeks on speculation seasonal maintenance will tighten supply.

Prices increased as much as 1.3 percent. An average of 1.6 million barrels a day of U.S. refining capacity will be offline in February for planned and unplanned work, according to Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. Another 1.4 million barrels in March and 850,000 barrels in April are scheduled to shut for turnarounds.

“You’ve got a lot of maintenance now, the economy has been showing improvement and people are anticipating a strong summer,” Sen said.

March-delivery gasoline rose 2.74 cents, or 1 percent, to $2.7104 a gallon at 10:10 a.m. on the New York Mercantile Exchange, after touching $2.7187, the highest intraday level since Jan. 2. Trading volume was 76 percent above the 100-day average.

Futures prices have climbed an average of 4.3 percent in February and 10 percent in March during the past five years, according to Nymex data compiled by Bloomberg.

Phillips 66 is performing scheduled work at its Alliance plant in Louisiana, according to the company. Citgo Petroleum Corp. began shutting both plants at its Corpus Christi, Texas, refinery on Feb. 5 for about 35 days of planned work, a person with knowledge of the work said yesterday.

Gasoline Discount

Gasoline’s discount to March ultra low sulfur diesel futures narrowed 0.45 cent to 30.76 cents, after being as wide as 40.06 cents on Feb. 3.

“If you take a broader view, this seasonally is a pretty good time for gasoline,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Look at February and March. They’re usually stronger. We’ve got turnarounds coming up and gasoline had become too cheap relative to heat.”

The motor fuel’s crack spread versus West Texas Intermediate, a rough measure of refining profitability, widened 81 cents to $15.66 a barrel. Its premium to London-traded Brent crude climbed 53 cents to $6.03.

“People are plowing into gasoline and out of heating oil, looking ahead to gasoline season,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Clearly, we’re seeing more length coming into the gasoline market.”

The average U.S. pump price fell 0.1 cent to $3.269 a gallon, according to data from Heathrow, Florida-based AAA. Prices have fallen 5.4 percent this year and are 28.6 cents below a year ago.

Ultra low sulfur diesel for March delivery advanced 2.29 cents, or 0.8 percent, to $3.018 a gallon on trading volume that was 15 percent above the 100-day average.

Diesel’s crack spread versus WTI widened 62 cents to $28.57 a barrel. The premium over European benchmark Brent rose 35 cents to $18.95.

To contact the reporter on this story: Barbara Powell in Houston at bpowell4@bloomberg.net

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

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