Gulf Gasoline Gains on Shipments to East Coast, Midwest
Stockpiles of motor gasoline on the Gulf Coast, referred to as PADD 3, slipped 1.44 million barrels to 75.6 million in the week ended June 7, the lowest level since May 10, according to U.S. Energy Information Administration data.
“This kind of decline should be expected in June,” Tom Finlon, director of Energy Analytics Group Ltd., said in a phone interview from Jupiter, Florida. “You’re supposed to have strong flow through pipelines up to the East Coast and Midwest around this time.”
Conventional, 85-octane gasoline, or CBOB, on the Gulf strengthened 0.5 cent to 12.75 cents a gallon below futures on the New York Mercantile Exchange at 1:59 p.m. The conventional, 87-octane grade also increased 0.25 cent to a discount of 10 cents.
Gulf Coast prices have been supported as refiners and blenders sent gasoline to the U.S. Midwest via Explorer Pipeline Co.’s Explorer line, where refinery shutdowns curtailed supply and pushed gasoline prices in Chicago as much as 85 cents over the Gulf June 3, and to the U.S. East Coast on Colonial Pipeline Co.’s line.
Also, a fluid catalytic cracker remained offline at Marathon Petroleum Corp. (MPC)’s Texas City, Texas, refinery.
“I’d imagine that’s also having an impact on the market,” Finlon said today.
Colonial allocated shipments this week on Line 1, which runs from Houston to Greensboro, North Carolina, while the Explorer line was delayed in recent weeks due to higher-than-normal demand, according to the companies. Explorer carries gasoline and diesel from the Gulf to the Midwest.
A company issues an allocation when demand to ship fuel exceeds a line’s capacity.
The 3-2-1 crack spread on the U.S. Gulf Coast, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, dropped 37 cents to $20.07 a barrel. The same spread for Light Louisiana Sweet oil slid 62 cents to $10.92 a barrel, a second consecutive decline, according to data compiled by Bloomberg.
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org