Spot gasoline in California dropped against futures as stockpiles increased on the West Coast and Tesoro Corp. said a vacuum unit at its refinery near Los Angeles would start in November.
Prices slipped against futures after the Energy Department said gasoline inventories increased 2.5 percent to 28.7 million barrels in PADD 5, which includes California, and U.S. gasoline demand stayed below 9 million barrels a day for an eighth week. Tesoro said the unit at Wilmington would deliver “significant product yield improvements.”
“You don’t buy in a down market unless you absolutely need to to take care of demand and demand is down,” said Bob van der Valk, an independent petroleum industry analyst in Terry, Montana. “There’s a lull between now and Thanksgiving. There’s nobody out really shopping. Demand will hover. The low has not been hit.”
Spot Carbob in Los Angeles fell 3 cents to a premium of 8 cents a gallon versus gasoline futures traded on the New York Mercantile Exchange at 3:58 p.m. East Coast time, data compiled by Bloomberg show.
Carbob in San Francisco decreased 3.5 cents a gallon to a discount of 3.5 cents to futures.
California-grade, or CARB, diesel in San Francisco gained 1.5 cents to a premium of 6.75 cents a gallon against heating oil futures traded on the Nymex. The same fuel in Los Angeles climbed 0.5 cent to 7.5 cents a gallon over futures.
Conventional 84 sub-octane gasoline to be blended with ethanol in Portland, Oregon, was unchanged at a 21.5-cent discount to gasoline futures. Low-sulfur diesel in Portland advanced 7 cents to 21 cents a gallon above heating oil futures.