California Gasoline Premium Sinks After Brown Relaxes Fuel Rules
The premium for California-blend gasoline, or Carbob, fell by more than half after Governor Jerry Brown directed state regulators to let refineries make winter- blend fuel.
The California Air Resources Board granted refineries permission yesterday to make an early shift to the winter blend, typically not sold until after Oct. 31. The winter blend is easier to make.
The premium for California-blend gasoline in Los Angeles versus futures on the New York Mercantile Exchange, lost 42.5 cents to 37.5 cents at 1:36 p.m. in New York, according to data compiled by Bloomberg. The same fuel in San Francisco slumped 42.5 cents to 30.5 cents a gallon above futures.
Retail prices began to skyrocket after Exxon Mobil Corp. (XOM)’s 150,000-barrel-a-day refinery in Torrance, near Los Angeles, reduced production Oct. 1 after a power failure. That followed a fire that knocked out a crude-processing unit at Chevron Corp. (CVX)’s plant in Richmond, near San Francisco, in August and the shutdown of a Chevron pipeline that delivers crude to Northern California because of contamination.
California-grade, or CARB, diesel in Los Angeles fell 4.75 cents to 11 cents a gallon higher than heating oil futures on the Nymex. The fuel in San Francisco dropped 5 cents to a premium of 11.5 cents a gallon versus futures.
Conventional, 87-octane gasoline in Portland, Oregon, lost 7.5 cents to 27.5 cents a gallon against gasoline futures.
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