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Gulf Gasoline Extends Longest Winning Streak Since 2002

Feb. 19 (Bloomberg) -- U.S. Gulf Coast gasoline strengthened for ninth consecutive day, extending its winning streak to the longest since 2002 as Motiva Enterprises LLC was said to shut a unit at its Port Arthur, Texas, plant.

The refinery shut a fluid catalytic cracker overnight and is now conducting unplanned repairs, according to a person familiar with operations, who asked not to be identified because the information isn’t public. The unexpected closing adds to work being done on the plant’s delayed coker, sulfur recovery unit and smallest of three crude units.

Refinery maintenance is also under way at Phillips 66’s Sweeny plant, Exxon Mobil Corp.’s Beaumont site and Alon USA Energy Inc.’s Big Spring facility, among others, according to data compiled by Bloomberg. Together, combined with the Motiva Port Arthur plant, the four refineries have a capacity of 1.26 million barrels a day, or about 14 percent of total U.S. Gulf Coast capacity.

Conventional, 87-octane gasoline on the Gulf Coast strengthened 3 cents to trade at parity with futures on the New York Mercantile Exchange at 4:12 p.m. That’s the ninth consecutive gain, the longest string of increases since October 2002, according to data compiled by Bloomberg. Reformulated gasoline, or RBOB, advanced 6.75 cents to a premium of 5.75 cents, the highest level since Oct. 10.

“Chronic issues at Motiva’s Port Arthur, Texas, refinery, as well as extended delays in ExxonMobil’s Baytown, Texas, refinery provided exceptional strength to U.S. Gulf Coast cash markets,” Thomas Finlon, director of Energy Analytics Group Ltd., wrote in a weekly report.

Ultra-low-sulfur diesel on the Gulf gained 2.25 cents to 7.63 cents above heating oil futures, the highest since Sept. 4, according to data compiled by Bloomberg.

‘Disproportionately High’

Crack spreads, or a measure of refining profitability, should “bode very well” in the near term because of the “disproportionately high maintenance schedules,” said Finlon, who is based in Jupiter, Florida.

The 3-2-1 crack spread on the Gulf Coast, measured by West Texas Intermediate in Cushing, Oklahoma, dropped 19 cents to $36.57 a barrel at 4:13 p.m., the first decline in five days. The same spread for Light Louisiana Sweet oil declined 54 cents to $14.77 a barrel.

The New York Harbor 3-2-1 spread, measured using Brent oil in Europe, was $14.25 a barrel, up from $14.08 Feb. 15. Reformulated gasoline strengthened 0.38 cent to 2 cents below futures, while ultra-low-sulfur diesel gained 0.12 cent to a premium of 9.25 cents over heating oil futures.

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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