Chicago Fuels Rally After Exxon Cuts Rates in Illinois
Chicago fuels strengthened relative to New York futures after Exxon Mobil Corp. (XOM) reduced rates at the 238,000-barrel-a-day Joliet, Illinois, refinery, the fifth-largest plant in the U.S. Midwest.
The discount for ultra-low-sulfur diesel fuel in Chicago narrowed 0.5 cent to 4.5 cents a gallon versus New York Mercantile Exchange futures at 12:43 p.m. The spread trimmed for a fifth day, the longest such streak since Nov. 16, 2012.
The differential for conventional, 85-octane gasoline, or CBOB, narrowed by 4.75 cents to 6 cents a gallon below futures, the strongest position since July 12.
The fuels rallied after regulatory filings showed that Exxon’s Joliet refinery shut an “east co” boiler and cut rates on July 26. The plant produces about 9 million gallons of gasoline and diesel a day, according to the company’s website.
Tricia Simpson, a spokeswoman for Exxon, said the information in the filings with the U.S. National Response Center and Illinois Emergency Management Agency was accurate. She declined to comment on day-to-day operations.
A cut in production at the plant may contribute to lower supply of refined products in the area, where the Energy Information Administration reported distillate stockpiles fell to 28.8 million barrels on July 19. Gasoline inventories were 49.1 million barrels.
The 3-2-1 crack spread in Chicago, a rough measure of refining margins for gasoline and diesel fuel based on West Texas Intermediate oil in Cushing, Oklahoma, widened $1.33 to $19.20 a barrel, according to data compiled by Bloomberg.
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