- Gulf Coast gasoline output falls ahead of peak driving season
- U.S. Gulf Coast importing rare gasoline cargo from China
The largest gasoline-producing region in the U.S. is importing supplies as repair work at refineries slows fuel production ahead of the busiest driving season.
At least two vessels hauling gasoline will discharge into Gulf Coast storage tanks by the end of May. The deliveries comes as regional outages in gasoline-producing capacity hit the highest seasonal level since at least 2012, according to data compiled by Bloomberg.
U.S. gasoline demand reached the highest seasonally on record as drivers consumed 9.4 million barrels a day in the four weeks ended April 22, according to the Energy Information Administration. Meanwhile, crude processing and refinery utilization rates have fallen along the Gulf Coast for three straight weeks.
“It’s like importing corn in Nebraska,” John Auers, executive vice president at Turner Mason & Co., said by phone from Dallas. “A short-term opportunistic operation is taking place.”
Repairs at Shell’s Deer Park, Texas, refinery and maintenance work at Citgo Corpus Christi, among others, shut in an average of 234,300 barrels a day of gasoline-producing capacity, data compiled by Bloomberg show. The production squeeze sent Houston wholesale values this week to the highest level since early November, making imports attractive, Patricia Hemsworth, Paragon Global Markets senior vice president, said by phone from New York.
Earlier this week, the Navig8 Honor discharged as much as 450,000 barrels of gasoline into a terminal in Beaumont, Texas, after storing the product at sea for two months, people familiar with the matter told Bloomberg.
Another tanker hauling as much as 330,000 barrels was chartered to move product to Houston from China. The vessel is expected to arrive in late May, Bloomberg vessel-tracking data show.
Last year, the U.S. Gulf Coast exported 157.8 million barrels of finished gasoline and imported 944,000 barrels, EIA data show. The region produced 47 percent of total U.S. gasoline the week ended April 22.
Gulf Coast 87 octane conventional gasoline rose 0.5 cent a gallon Thursday to close at a 12.5-cent discount to May Nymex RBOB futures contract. Cash prices ended the day at $1.4857 a gallon.