Gulf Gasoline Reaches 3-Week High on PDVSA Plant Outage

U.S. Gulf Coast gasoline strengthened to the smallest discount to futures in almost three weeks on speculation that a power failure at a Petroleos de Venezuela SA refinery may boost exports.

The discount for conventional, 85-octane gasoline, or CBOB, on the Gulf Coast tightened 1.75 cent to 18.75 cents a gallon versus New York Mercantile Exchange futures at 3:53 p.m., the lowest level since June 18, according to data compiled by Bloomberg. The conventional 87-octane grade gained 1.25 cents to a discount of 13.5 cents.

The differentials shrank after PDVSA’s 355,000-barrel-a-day Curacao plant was hit by the outage yesterday.

“We’re going to push out exports faster than the plant can say they are back and ready to go,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “Until buyers can say no, we’ll ship out more barrels.”

As more refined product is shipped to the Caribbean, supplies on the Gulf Coast may tighten. Stockpiles of motor fuel on the Gulf, known as PADD 3, were 77.9 million barrels in the week ended June 28, according to data from the EIA, the Energy Department’s statistical arm.

The 3-2-1 crack spread on the Gulf Coast, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, climbed 9 cents to $13.60 a barrel. The same spread based on Light Louisiana Sweet oil advanced 54 cents to $7.75 a barrel.

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