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Gasoline Gains on Concern Irving Outage to Further Reduce Supply

Oct. 30 (Bloomberg) -- Gasoline rose on concern a unit shutdown at Irving Oil Corp.’s refinery in New Brunswick may further reduce U.S. East Coast supplies that fell last week.

Futures climbed as Irving’s Saint John plant shut the larger of its fluid catalytic crackers yesterday, Genscape Inc. reported. Stockpiles in PADD 1 sank 1.11 million barrels to 56.1 million last week, the Energy Information Administration said. Gasoline’s premium to West Texas Intermediate jumped 18 percent as the WTI-Brent spread neared the widest level since April.

The EIA report “set a positive tone and we’ve got reasons for gasoline to be up,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Some of the gain in the crack spread is gasoline’s strength but the majority is due to WTI’s weakness.”

Gasoline for November delivery rose 4.1 cents, or 1.6 percent, to settle at $2.6508 a gallon on the New York Mercantile Exchange. Trading volume was 1 percent below the 100-day average at 3:20 p.m.

The November contract’s premium to December widened 1.11 cent to 2.92 cents a gallon. November gasoline and diesel contracts will expire at the end of floor trading tomorrow.

The Irving Saint John refinery is “a major supplier into the New England market,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “This is the cat cracker they’ve had trouble with all year long.”

The WTI-Brent spread widened $2.28 to $13.09 a barrel, the biggest gap since April 2.

Gasoline Supplies

Total gasoline inventories fell 1.71 million barrels to 213.8 million in the week ended Oct. 25. Analysts in a survey by Bloomberg estimated a decline of 200,000 barrels.

The motor fuel’s crack spread versus WTI widened $2.69 to $13.34 a barrel. The fuel’s spread versus Brent rose 41 cents to a premium of 25 cents.

U.S. retail pump prices, averaged nationwide, rose 0.1 cent to $3.279 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 25.5 cents below a year ago.

Distillate inventories fell 3.06 million barrels to 122.7 million barrels. Analysts in the survey estimate an increase of 1 million. PADD 1 distillate supplies fell 534,000 barrels to 39.1 million.

Ultra-low-sulfur diesel for November delivery rose 1.45 cents, or 0.5 percent, to $2.9786 a gallon on trading volume that was 5.7 percent above the 100-day average.

ULSD’s premium over WTI gained $1.98 to $28.26 a barrel. The spread versus Brent narrowed 30 cents to $15.17.

To contact the reporter on this story: Barbara Powell in Houston at bpowell4@bloomberg.net

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

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