Gasoline Discount Narrows in Midwest on Holly Tulsa East

Midwest gasoline’s discount to futures narrowed to the smallest level since Feb. 28 as HollyFrontier Corp. prepared for work at the Tulsa East refinery in Oklahoma and Northern Tier Energy LP conducted maintenance in Minnesota.

The 70,300-barrel-a-day Tulsa plant expects to perform work on a crude unit, naphtha reformer, penex unit and isomerization unit in May, the company said in a Feb. 26 earnings call with investors. Julia Heidenreich, a company spokeswoman in Dallas, declined today to comment on daily activities.

Northern Tier is said to be in a turnaround that includes the No. 2 crude unit and hydrotreater at the 74,000-barrel-a-day St. Paul Park plant. The work is expected to last until about May 15, according to a person familiar with operations.

The discount for conventional, 87-octane gasoline in the Group 3 area strengthened 3.38 cents to 0.75 cents a gallon versus New York Mercantile Exchange futures at 2:25 p.m. The area, part of PADD 2, stretches north from Tulsa, Oklahoma, to Minnesota and North Dakota,

The turnarounds by HollyFrontier and Northern Tier may draw from area supplies, which are at the lowest level this year, according to the Energy Information Administration. Stockpiles of gasoline fell 1.1 million barrels to 52.5 million in the week ended April 19, the least since Dec. 28, the Energy Department’s statistical arm reported.

The 3-2-1 crack spread in Group 3, a rough measure of refining margins for gasoline and diesel based on West Texas Intermediate oil in Cushing, Oklahoma, fell 22 cents to $25.41 a barrel.