Gulf Gasoline Slumps on Seasonally-High Supplies, ImportsChristine Harvey
U.S. Gulf Coast gasoline extended its slump for a sixth day after a government report showed area inventories reached a record high for this time of year amid a surge in imports. Crack spreads fluctuated.
Stockpiles of motor fuel on the Gulf Coast climbed 2.19 million barrels to 76.6 million in the week ended May 17, the most in any May week in records begun in 1990, according to U.S. Energy Information Administration data. Imports to the region, known as PADD 3, jumped to 185,000 barrels a day last week, the most since May 20, 2011, the data showed.
“U.S. refineries have access to cheap West Texas Intermediate, cheap natural gas to fuel the plants, and over the last decade, there have been investments on units designed to increase output,” Kyle Cooper, director of research for IAF Advisors, said in a phone interview from Houston. “That’s why we’re seeing this situation exist. It’s somewhat bearish.”
The discount for conventional, 85-octane gasoline, or CBOB, on the Gulf Coast widened 1.12 cents to 25.75 cents a gallon versus New York Mercantile Exchange Futures at 12:05 p.m., the lowest level since April 5. Reformulated gasoline, known as RBOB, was unchanged at 6.25 cents a gallon under futures.
West Texas Intermediate for July delivery fell $1.45 to $94.73 a barrel at 12:11 p.m., widening its discount to benchmark Brent oil to $8.34, according to data compiled by Bloomberg.
Supplies may rise along the Gulf Coast after Motiva Enterprises LLC ramped up a new crude unit that boosted the capacity of its Port Arthur, Texas, refinery to 600,000 barrels a day, making it the largest plant in the U.S.
Valero Energy Corp. brought a 57,000-barrel-a-day hydrocracker online at its Port Arthur plant in December. The company’s Houston plant was returning a fluid catalytic cracker to planned rates early today after an “issue” yesterday, Bill Day, a company spokesman in San Antonio, said in an e-mail.
The 3-2-1 crack spread on the Gulf Coast, a rough measure of refining margins based on WTI in Cushing, Oklahoma, was little changed at $18.96 a barrel. The same spread based on Light Louisiana Sweet oil gained 38 cents to $9.81 a barrel.