Gasoline futures declined as U.S. refiners wrapped up seasonal maintenance and prepared to restart plants. Crack spreads narrowed.
Futures fell 1 percent, the first drop in three days. The April crack spread, or premium for gasoline over West Texas Intermediate crude, slipped 71 cents to $40.01 a barrel. The spread versus Brent oil on the ICE Futures Europe exchange shrank 96 cents to $20.04.
“Prices have already plunged from their highs,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Refineries are completing their turnarounds over the next several weeks in the U.S. and will be increasing supplies.”
April-delivery gasoline declined 3.03 cents to settle at $3.0983 a gallon on the New York Mercantile Exchange on volume that was 0.3 percent below the 100-day average for the time of day. April’s premium over the May contract narrowed to 3 cents from 4 cents a gallon on March 1, indicating supplies may increase as plants boost production after seasonal maintenance.
On the Gulf Coast, Motiva Enterprises LLC is expected to restart units before the end of March, including a crude unit and coker, after scheduled work. The largest U.S. refinery is gradually ramping up rates on its largest crude unit, which has been plagued by fires and leaks since its May debut.
Philadelphia Energy Solutions is approaching the end of a 40-day turnaround of a crude unit at the Girard Point section of the East Coast’s largest plant.
Colonial Pipeline Co. expanded by 60,000 barrels a day its fuel line from Greensboro, North Carolina, to Linden, New Jersey, allowing more gasoline and diesel to flow to the New York Harbor area from the Gulf Coast.
“You’re going to start to see refineries come back in the Northeast and the Gulf Coast and you have Colonial’s additional 60,000 barrels a day into the Northeast,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.
Gasoline at the pump, averaged nationwide, fell 0.5 cent to $3.746 a gallon, AAA said today on its website. It was the fifth consecutive decline, the longest retreat since Jan. 16. Prices, which have climbed 14 percent this year, are 1.8 cents below a year earlier.
Heating oil for March delivery fell 1.1 cents, or 0.4 percent, to $2.9191 a gallon, the lowest settlement since Dec. 10. Trading volume was 4.8 percent below the 100-day average.