Chicago Gasoline Gains After Kentucky Refinery Power FailureEliot Caroom
Chicago gasoline strengthened after Marathon Petroleum Corp.’s Catlettsburg, Kentucky, refinery had a power failure that shut down multiple units.
Conventional, 85-octane gasoline, or CBOB, in Chicago gained 2.5 cents to 12 cents a gallon under New York Mercantile Exchange gasoline futures at 12:40 p.m., according to data compiled by Bloomberg. Marathon was restarting units at the 240,000 barrel-a-day plant today.
Gasoline sold in the Midcontinent, or Group 3 market, fell 1 cent a gallon to a discount of 6.5 cents against futures after Koch Pipeline Co. said a pipeline that carries crude to two Minneapolis-area refineries returned to service after shutting Aug. 6.
“A lot of times when those pipelines go down, you spike prices up and then when they come back online, you reverse the other way,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “That’s because people are panic buying and when they realize that things aren’t as bad, they already have supply, and prices come back down even further.”
The 3-2-1 crack spread in Chicago, a rough measure of refining margins for gasoline and diesel based on West Texas Intermediate oil in Cushing, Oklahoma, dropped 75 cents to $12.26 a barrel.