Colonial Repairs Spur Biggest Gulf Gas Loss in 3 WeeksChristine Harvey
A delay in repairs to Colonial Pipeline Co.’s main gasoline line running from Houston to North Carolina today spurred the biggest loss for U.S. Gulf Coast gasoline in more than three weeks.
Colonial’s Line 1, which carries more than 1.4 million barrels of gasoline from Houston to Greensboro, is operating at reduced flows as the company repairs damage to a booster pump. Colonial today said it “discovered significant damage” to the pump and pushed back the expected completion of maintenance to Jan. 7 from Jan. 5.
The booster pump failed Jan. 1, said Colonial, which operates 5,500 miles of oil product pipelines connecting refineries in the U.S. Gulf Coast to customers in the Southeast and East Coast. Lines 3, 4, 22 and 24, which serve New York, New Jersey, Pennsylvania, Maryland and eastern North Carolina, are also at reduced flows during the repairs, the company said in a bulletin to shippers.
Reformulated gasoline to be blended with ethanol, or RBOB, on the Gulf Coast fell 5 cents to 9.5 cents a gallon below futures on the New York Mercantile Exchange at 3:29 p.m. That’s the biggest decline since Dec. 13. Conventional gasoline to be blended with ethanol, or CBOB, retreated 3 cents to 15 cents below futures.
Speculation that Colonial’s longer-than-anticipated repairs will keep supply in the region contributed to today’s decline in the Gulf, according to Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “It’s more about relieving supply from the Gulf Coast,” he said.
Ultra-low-sulfur diesel in the region dropped 0.25 cent to trade at a discount of 2.25 cents to heating oil futures.
Gasoline in the New York Harbor extended losses for a second day as inventories in the region rose to the highest level in almost nine months.
Stockpiles of motor fuel in the Central Atlantic area including New York Harbor, referred to as PADD 1B, gained 578,000 barrels to 26.1 million in the week ended Dec. 28, the Energy Department reported today. That’s the highest level since May 18.
The premium for RBOB in New York dropped 0.13 cent to 5 cents above futures, while CBOB fell 0.12 cent to 3.88 cents above Nymex.