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Gasoline Jumps to Three-Month High on U.S. Refinery Repairs

Jan. 22 (Bloomberg) -- Gasoline jumped to a three-month high on speculation that planned and unplanned refinery repairs may reduce inventories.

Futures rose 1.2 percent as Philadelphia Energy Solutions plans to close the Girard Point section of the largest plant near New York Harbor, the delivery point for gasoline futures, this month, and a fluid catalytic cracker remained down at Delta Airlines Inc.’s Trainer, Pennsylvania, refinery. Valero Energy Corp.’s McKee, Texas, plant and Chevron Corp.’s Mississippi operation shut units.

“Gasoline in New York Harbor continues strong on the back of problems at Delta Trainer and upcoming maintenance at Philadelphia Energy Solutions’ refinery,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for February delivery rose 3.31 cents to $2.8299 a gallon on the New York Mercantile Exchange, the highest settlement since Oct. 16. The more actively traded March contract climbed 2.98 cents to $2.8411.

Futures have increased 4.6 percent in four days, the longest period of gains since Dec. 12.

There was no Nymex floor trading yesterday in observance of the Martin Luther King Jr. holiday in the U.S.

Motiva Enterprises LLC will shut a crude unit, a delayed coker and a sulfur recovery unit at the Port Arthur, Texas, refinery Feb. 17 for a 38-day maintenance turnaround, according to two people familiar with operations.

“We know that maintenance shutdowns are coming up and that’s clearly supporting gasoline,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.

Refinery Rates

Refinery utilization fell 1.2 percentage points in the week ended Jan. 11, the lowest level in eight weeks, data from the U.S. Energy Information Administration show. That same week, gasoline inventories in PADD 1, which includes New York Harbor, were at the lowest seasonal level since 2006.

Between now and May, an average 1.5 million barrels a day of U.S. refinery capacity will be shut for maintenance, according to Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London.

Heating oil was supported by speculation that colder weather will increase demand for heating fuel at a time when inventories along the East Coast are the lowest since June 2008. PADD 1 heating oil supplies sank to 15.4 million barrels as of Jan. 11, 42 percent below a year earlier, according to EIA data.

From Jan. 22 through 26 and again from Feb. 1 through 5, temperatures from the Midwest to the East Coast and throughout Ontario and western Quebec may be 8 degrees Fahrenheit (4.4 Celsius) below normal, said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland.

Heating oil for February delivery gained 1.57 cents, or 0.5 percent, to settle at $3.0682 a gallon on the exchange. The March contract increased 1.38 cents to $3.0557.

The retail price for regular gasoline, averaged nationwide, rose 0.5 cent to $3.310 a gallon, AAA said today on its website. That’s the fifth consecutive increase.

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

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

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