Chicago Gasoline Gains as Shipments to East Reduce Supply
Gasoline gained for a second day in Chicago as distributors sent fuel to the U.S. East Coast in the wake of Hurricane Sandy, drawing down Midwest supplies already hovering at the lowest level in more than 20 years.
Requests to ship fuel along Buckeye Partners LP (BPL)’s Line 415/521, which transports products from the Midwest and delivers to areas including Pittsburgh, exceeded maximum capacity last week, the company said Nov. 16. The boost in nominations may continue to strain supplies that fell 1.07 million barrels to 44.5 million in the Padd 2 region last week, the lowest since the Energy Department started publishing weekly data in 1990.
Conventional gasoline for ethanol blending, or CBOB, advanced 8.5 cents to trade at a premium of 2 cents a gallon over futures on the New York Mercantile Exchange at 2:42 p.m. Gasoline in the Midcontinent, or Group 3 market, gained 0.25 cent to trade at a discount of 12.13 cents a gallon.
“Things have been so tight in the East, they’re sending gasoline to the East Coast,” Mosby, vice president of ADM, a supply consultant in Kansas City, Missouri, said in a telephone interview. “You’re still seeing the effects of Sandy and there are also still some issues at BP Whiting. Those are the two things holding it together.”
BP shut the Whiting refinery’s largest crude unit, known as Pipestill 12, on Nov. 5 for a planned maintenance turnaround, according to a person familiar with the situation. The crude unit has a capacity of 235,000 barrels a day, the person said.
Stockpiles of the motor fuel on the U.S. East Coast dropped 1.54 million barrels to 45.1 million last week, according to the Energy Department. Supplies are constrained as Phillips 66’s 238,000-barrel-a-day Bayway refinery remains offline for repairs. Operations are expected to return by the end of the month, the company said Nov. 5.
Reformulated gasoline in the New York Harbor declined by 7.5 cents to trade at a premium of 9.50 cents a gallon over futures at 3:54 p.m. local time.
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