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N.Y. at 2-Month High on Refinery Slowdown, Supply Slump

Feb. 13 (Bloomberg) -- Diesel fuel strengthened to the highest level in two months in New York Harbor as refinery activity slowed and regional supplies slumped for a fourth week.

U.S. East Coast refineries processed 982,000 barrels a day in the week ended Feb. 8, down 7.5 percent from a week earlier, Energy Information Administration data showed today. Stockpiles of distillates, including diesel fuel and heating oil, fell 1.35 million barrels to 22.1 million in the Central Atlantic region that includes New York.

Ultra-low-sulfur diesel in the region strengthened 1.5 cents to trade at a premium of 9.88 cents a gallon versus heating oil futures on the New York Mercantile Exchange at 3:42 p.m., the highest level since Dec. 12, data compiled by Bloomberg show. Reformulated, 84-octane gasoline, or RBOB, retreated 1.38 cents to 4.63 cents below futures. Motor fuel supplies in the East Atlantic climbed to 32.8 million barrels.

The 3-2-1 crack spread in New York, a measure of refining profitability for distillates and gasoline based on Brent oil in Europe, fell 73 cents to $10.91 a barrel. The spread reached $14.16 at the beginning of this month.

Gasoline cracks on the U.S. East Coast have been “supported by reduced refinery output and further scheduled outages in the second quarter,” according to a report released by the International Energy Agency today. Gulf gasoline cracks also posted “exceptional” gains on earlier-than-expected refinery turnarounds, the report showed.

Gulf Coast spreads, based on West Texas Intermediate in Cushing, Oklahoma, dropped 8 cents to $30.33 a barrel, according to data compiled by Bloomberg. The spread for Light Louisiana Sweet retreated 18 cents to $9.73 a barrel.

Gulf Supplies

Inventories of diesel fuel on the Gulf dropped to 40.9 million barrels last week, while gasoline supplies slipped to 80 million barrels, according to EIA data.

Ultra-low-sulfur diesel advanced 0.5 cent to 6 cents a gallon above heating oil futures, the highest level since Oct. 5. Reformulated gasoline in the Gulf dropped 0.25 cent to trade at a discount of 10 cents to gasoline futures.

The spread between gasoline in the Gulf Coast and New York Harbor rose 0.31 cent to 6.81 cents a gallon, Bloomberg data show.

Alon USA Energy Inc.’s 70,000-barrel-a-day Big Spring, Texas, refinery is running a fluid catalytic cracker on a minimum charge because of a scheduled turnaround, while planned work is under way at Exxon Mobil Corp.’s 345,000-barrel-a-day Beaumont refinery, the companies said.

Delta Air Lines Inc.’s Trainer, Pennsylvania, refinery is in the process of restarting a fluid catalytic cracker. The plant has the capacity to process as much as 185,000 barrels a day, data compiled by Bloomberg show.

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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