Spot gasoline on the U.S. Gulf Coast strengthened to a six-week high as refiners carried out seasonal maintenance, lowering production in the region.
Conventional, 87-octane gasoline climbed 2.5 cents to 8.25 cents a gallon below futures on the New York Mercantile Exchange at 3:45 p.m., the strongest since Sept. 3, according to data compiled by Bloomberg. Conventional CBOB gasoline gained 2.25 cents to 9 cents below futures.
Differentials narrowed as refiners including Marathon Petroleum Corp.’s Garyville, Louisiana, site and Delek US Holdings Inc.’s Tyler, Texas, plant planned to shut units for work this month. Valero Energy Corp.’s Port Arthur refinery, also in Texas, is operating at reduced rates during repairs at a wet-gas compressor, a person familiar with operations said.
Refineries in the area, known as PADD 3, processed almost 8 million barrels a day of crude oil and other feedstocks in the week ended Oct. 4, the lowest level since April 26, according to U.S. Energy Information Administration data compiled by Bloomberg.
“As PADD 3 refiners progress with seasonal maintenance, regional crude oil refinery inputs dropped,” Charles R. Weber Co., a shipbroker based in Greenwich, Connecticut, said in a weekly report.
Marathon was expected to shut a crude unit and coker for about 30 to 40 days of planned maintenance in Garyville, while Delek planned to carry out five to six weeks of work on an alkylation unit. Valero’s Port Arthur refinery is operating the larger of two crude units at reduced rates
The Garyville, Tyler and Port Arthur refineries have a combined capacity of about 892,000 barrels a day, according to data compiled by Bloomberg.
The 3-2-1 crack spread on the Gulf Coast, a rough measure of refining margins for gasoline and diesel fuel based on West Texas Intermediate oil in Cushing, Oklahoma, rose 18 cents to $11.40 a barrel. Cracks based on Light Louisiana Sweet oil, the Gulf Coast benchmark, gained 88 cents to $8.90 a barrel, according to data compiled by Bloomberg.
Ultra-low-sulfur diesel on the Gulf Coast spot market rose 0.12 cent to 5.63 cents below Nymex futures, according to data compiled by Bloomberg.
Crude units heat oil and separate it based on boiling temperatures into intermediate products for further processing in other parts of the plant. Cokers convert heavy residual fuel remaining after vacuum distillation into lighter products such as naphtha and diesel. Alkylation units produce a high-octane blending component for gasoline.