Gulf Fuels Strengthen as Valero Meraux Shuts Sulfur UnitChristine Harvey
Gulf Coast spot fuels strengthened versus futures as Valero Energy Corp. shut a sulfur recovery unit at its Meraux, Louisiana, refinery. Crack spreads gained the most in more than six weeks.
Valero’s 135,000-barrel-a-day Meraux plant idled the unit after a power interruption, said Bill Day, a company spokesman based in San Antonio. The 3-2-1 crack spread for Gulf refineries, a rough measure of refining margins based on West Texas Intermediate in Cushing, Oklahoma, rose $2.17 to $24.15 a barrel, the most since Feb. 22, data compiled by Bloomberg show.
The sulfur unit closing, along with crude unit maintenance at Motiva Enterprises LLC’s Port Arthur, Texas, refinery, may be drawing from supplies along the Gulf. The area’s inventories of gasoline were 74.2 million barrels last week, while distillate stockpiles were 36.1 million, Energy Information Administration data showed.
The discount for conventional, 87-octane gasoline narrowed by 3 cents to 19.5 cents a gallon below futures traded on the New York Mercantile Exchange at 2:01 p.m., the lowest level in two weeks, according to data compiled by Bloomberg. Reformulated gasoline, or RBOB, strengthened 3.25 cents to 3 cents a gallon below futures, while ultra-low-sulfur diesel increased 0.25 cent to trade at a premium of 0.75 cent a gallon.