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Gulf Gasoline Rises to Three-Week High on Refinery Work

Feb. 11 (Bloomberg) -- U.S. Gulf Coast gasoline strengthened to the highest level in three weeks as refiners including Alon USA Partners LP and Western Refining Inc. began maintenance in Texas.

Alon’s Big Spring refinery is conducting an internal inspection of a boiler associated with a fluid catalytic cracker, while Western Refining today entered a turnaround that will reduce rates at the El Paso plant, the companies said. The two have a combined capacity of 198,000 barrels a day, data compiled by Bloomberg show.

Conventional, 87-octane gasoline on the Gulf Coast strengthened 1.5 cents to 15 cents a gallon below futures on the New York Mercantile Exchange at 2:16 p.m., the narrowest gap since Jan. 16. Reformulated gasoline to be blended with ethanol, or RBOB, in the region advanced 1 cent to 11 cents below futures. Ultra-low-sulfur diesel fuel gained 1.25 cents to 3.75 cents a gallon above heating oil futures.

Supplies of gasoline in the region the week ended Feb. 1 fell 1.61 million barrels to 80.5 million, while distillate stockpiles climbed 739,000 barrels to 41.1 million, Energy Information Administration data show.

“Refinery maintenance season is apparently cresting,” Thomas Finlon, director of Energy Analytics Group Ltd., wrote in a Feb. 10 note.

Refineries processed 7.4 million barrels a day of crude and other feedstock on the Gulf Coast last week, 60,000 less than the previous week, according to EIA data. The U.S. processed 14.7 million barrels, 0.9 percent less than the week earlier.

Refining Margin

The 3-2-1 crack spread, or a measure of refining profitability for gasoline and diesel on the Gulf Coast based on West Texas Intermediate in Cushing, Oklahoma, dropped $1.70 to $29.29. The same spread for Light Louisiana Sweet oil slid $1.25 to $7.39 a barrel.

The spread between conventional gasoline on the U.S. Gulf Coast and the Midwest narrowed to 8.22 cents a gallon. The 3-2-1 crack spread between WTI Midland crude and midcontinent gasoline and diesel, slipped $1.29 to $31.87 a barrel.

Conventional gasoline in the Group 3 region advanced 2 cents to 7.25 cents a gallon below futures, the narrowest differential since Nov. 7, data compiled by Bloomberg show. Ultra-low-sulfur diesel in the region gained 1.25 cents to a premium of 4.75 cents a gallon versus heating oil futures.

‘Tight’ Supplies

Supplies of motor fuel in the region hovered at 53.6 million barrels last week, the lowest seasonal level since 2009, according to EIA data compiled by Bloomberg. Inventories of distillates including heating oil and diesel fuel were 30.3 million last week.

Refineries including Phillips 66’s Wood River in Illinois and Marathon Petroleum Corp.’s Catlettsburg plant in Kentucky this month plan to conduct scheduled maintenance, according to the companies. BP Plc.’s Whiting refinery in Indiana, the biggest in the Midwest region, known as PADD 2, has its largest crude unit down until the middle of the year. The refineries make up a combined capacity of about 1.02 million barrels a day.

Maintenance at Wood River and Whiting “will continue to keep refined product supplies tight in the midcontinent,’ Finlon, who is based in Jupiter, Florida, said in the report.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

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

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