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Los Angeles Jet Fuel Rises to Three-Week High as BP Repairs Unit

April 4 (Bloomberg) -- Spot jet fuel in Los Angeles gained to the highest level against futures in more than three weeks as BP Plc performed maintenance on a jet fuel hydrotreater at the Carson oil refinery, the second-largest in California.

The 266,000-barrel-a-day Carson plant was scheduled to shut the treater for planned repairs beginning April 1, a person with direct knowledge of the schedule said March 28. The work is expected to last until at least April 8, a person familiar with operations at the refinery said today.

Jet fuel in Los Angeles strengthened 1.25 cents against ultra-low-sulfur diesel futures traded on the New York Mercantile Exchange to a premium of 5.75 cents a gallon at 4:11 p.m. East Coast time, data compiled by Bloomberg show. That’s the highest level for the fuel since March 11.

The Carson refinery plans to flare gases from April 8 through April 15, London-based BP said in a notice to the South Coast Air Quality Management District. The flaring isn’t related to a breakdown, the filing shows.

Jet fuel production in California slipped 0.2 percent in the seven days ended March 29 to 1.66 million barrels, a six-week low, according to data posted on the state Energy Commission’s website late yesterday.

California-blend gasoline, or Carbob, in Los Angeles was unchanged versus gasoline futures traded on the New York Mercantile Exchange at a premium of 5.75 cents a gallon. The same fuel in San Francisco climbed 0.5 cent to a premium of 8.5 cents a gallon.

San Francisco

The premium for Carbob in San Francisco versus the fuel in Los Angeles climbed a second day, gaining 0.5 cent to 2.75 cents a gallon. Last week, San Francisco climbed to the highest level against Los Angeles in seven months.

California-blend, or CARB, diesel in San Francisco fell by 2 cents against ULSD futures to a premium of 12 cents a gallon. The same fuel in Los Angeles dropped 1 cent to 5.5 cents a gallon below futures.

In Portland, Oregon, low-sulfur diesel also weakened, by 0.5 cent to a 14.5-cent premium versus ULSD futures. Gasoline there was unchanged at a discount of 5.5 cents to Nymex futures.

The 3-2-1 crack spread of Alaska North Slope crude, Carbob in Los Angeles and CARB diesel in Los Angeles dropped for the third straight day, losing $1.27 to $18.52 a barrel at 4:26 p.m. New York time, the lowest level in more than a week. The spread, a rough indicator of short-term refinery profit margins, hit a one-year low of $3.86 a barrel in December.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

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

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