Heating oil and gasoline futures jumped after a crude unit was shut at the largest oil refinery in the U.S.
Heating oil gained 1.4 percent after Motiva Enterprises LLC idled the new 325,000-barrel-a-day crude unit at its Port Arthur, Texas, plant. The unit, which was running at about 240,000 barrels a day after resuming operation this month, shut down following a fire.
“Since it was a game-changer when it restarted, it will be a game-changer when it shuts again,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “We had all factored in higher production of distillate and gasoline.”
Heating oil for January delivery advanced 3.98 cents to settle at $2.9868 a gallon on the New York Mercantile Exchange, after touching $3.0002. Gasoline for January delivery advanced 3.6 cents, or 1.4 percent, to settle at $2.6465 a gallon.
The January heating oil crack spread jumped $1.54 to $38.68 a barrel, and the gasoline spread increased 53 cents to $24.38 a barrel.
“It should be bullish for the crack spreads,” Lebow said.
Futures pared gains briefly, with heating oil slipping to $2.9649, after the Energy Department reported that distillate inventories rose 2.99 million barrels to 118.1 million last week. Gasoline inventories advanced 5 million barrels to an eight-month high of 217.1 million.
“The inventory report was bearish but maybe it was neutralized by the Motiva Port Arthur story and the uncertainty of how long the unit will be shut,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Futures also gained after the Federal Reserve’s Federal Open Market Committee announced additional stimulus for the economy. The Fed will buy $45 billion a month of Treasury securities starting in January.
The average nationwide cost for regular gasoline fell 1.3 cents to a $3.315 a gallon, AAA said today on its website. That’s the lowest level since Jan. 3.