Gasoline Gains on Speculation Refinery Shutdowns Lower Supply
Gasoline rose on speculation that refinery shutdowns are reducing inventories of East Coast stockpiles that are seasonally the lowest since 2004.
Futures advanced as Korea National Oil Corp.’s 115,000- barrel-a-day Come by Chance refinery in Newfoundland is assessing units after a power loss shut the plant yesterday. Hess Corp. will shut its New Jersey plant later this month. The gasoline crack spread rose to the highest level since October.
“We have had so many refinery outages the past few days and seasonally there is maintenance,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London. “A lot of refineries are older in the U.S. and a lot of refinery maintenance was pushed back to take advantage of good margins.”
Gasoline for March delivery rose 3.55 cents, or 1.2 percent, to $3.047 a gallon at 9:34 a.m. on the New York Mercantile Exchange. Futures rose on volume that was 20 percent below the 100-day average for the time of day. Gasoline has been the top performer for the past month on the Standard & Poor’s GSCI commodity index.
Power has been restored to the Come by Chance refinery and “equipment is being closely assessed before start-up,” Gloria Slade, a refinery spokeswoman, said in an e-mail today.
The March gasoline crack spread versus West Texas Intermediate widened 75 cents to $31.06 a barrel on the exchange. The spread versus Brent increased 19 cents to $11.07.
“The refinery produces about 30,000 barrels a day of gasoline that is sold primarily in the New England market,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for March delivery advanced 4.23 cents, or 1.3 percent, to $3.1963 a gallon on the Nymex. Prices touched $3.1987, the highest intraday level since Oct. 19. Volume was 74 percent above the 100-day average for the time of day.
The retail price for regular gasoline, averaged nationwide, rose 1 cent to $3.533 a gallon, the highest level since Oct. 29, AAA said today on its website. Costs have climbed 7.3 percent this year and are 1.6 percent more than a year ago.
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