Gulf Gasoline Weakens as Valero, Phillips 66 Finish Work

Gasoline weakened for a second day against futures on the U.S. Gulf Coast after Valero Energy Corp. and Phillips 66 completed maintenance at refineries in Texas.

Valero returned a crude unit to service after five weeks of planned maintenance at the McKee refinery in Sunray, while Phillips 66 completed scheduled work at its Borger plant, the companies said today. The sites can process a combined 316,000 barrels a day, or 3.5 percent of U.S. Gulf Coast refining capacity, according to data compiled by Bloomberg.

Supplies of motor fuel on the Gulf, referred to as PADD 3, declined 168,000 barrels to 71.7 million in the week ended April 26, U.S. Energy Information Administration data show. Refinery utilization rates were 85.8 percent, up from 84.9 percent the week earlier.

The discount for conventional, 85-octane gasoline, or CBOB, on the Gulf Coast shrank 0.75 cent to 15 cents a gallon below futures on the New York Mercantile Exchange at 12:03 p.m. Reformulated gasoline, or RBOB, was steady at 3.5 cents under futures. Ultra-low-sulfur diesel fuel was unchanged at discount of 3.75 cents a gallon to Nymex futures.

Borger maintenance may have included a fluid catalytic cracker and alkylation unit, according to people familiar with plant operations.

The 3-2-1 crack spread on the Gulf, a rough measure of refining margins for gasoline and diesel based on West Texas Intermediate in Cushing, Oklahoma, gained 68 cents to $21.24 a barrel. The same spread for Light Louisiana Sweet oil climbed 78 cents to to $10.04 a barrel.

Gulf-N.Y. Spread

Gasoline on the Gulf strengthened 0.72 cent to trade at 3.29 cents below the fuel in New York Harbor, the narrowest spread since March 19, according to data compiled by Bloomberg. Reformulated, 84-octane gasoline in the harbor gained 0.63 cent to a premium of 0.13 cent a gallon versus futures.

Imports of motor fuel to the U.S. East Coast dropped to 564,000 barrels last week, down 28,000 from the previous week, EIA data showed. Supplies in the region were 61.7 million, the highest level since March 9, 2012.

“Shipping reports indicate a slight drop in chartering activity that should render imports down to near 500,000 barrels per day in the coming weeks,” Energy Analytics Group Ltd. said in a weekly report.

Ultra-low-sulfur diesel fuel in the New York Harbor weakened 0.25 cent to a premium of 1.13 cents a gallon above futures. The 3-2-1 crack spread for refineries in the region, based on Brent oil in Europe, dropped 45 cents to $15.09 a barrel.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE