Chicago Gasoline Weakens Against Futures to Lowest Since March

Chicago gasoline slumped to a nine-month low relative to futures as refinery activity in the Midwest increased to the highest level in 15 months.

Conventional, 85.5-octane gasoline, or CBOB, in Chicago fell 2.5 cents to 34 cents a gallon below futures on the New York Mercantile Exchange at 2:35 p.m., the lowest level since March 1, according to data compiled by Bloomberg. Conventional, 85-octane gasoline in the Midcontinent dropped 1.25 cents to a discount of 39.75 cents, the lowest since Jan. 8.

Gross inputs by refiners, an indication of refinery activity, rose in the U.S. Midwest, or PADD 2 region, by 96,000 barrels a day to 3.6 million in the week ended Nov. 22, according to the Energy Information Administration. That was the highest level in the region since Aug. 17, 2012. Brent crude settled today at a $19.01 premium to West Texas Intermediate, the most since March 7.

“Chicago probably gets pushed to 40 cents under by the end of December,” Steve Mosby, vice president of ADMO Energy LLC, said by phone from Kansas City, Missouri. “You’ve got the Brent running, the crack spreads building, these guys are going to run these (refineries) hard.”

The 3-2-1 crack spread in Chicago, a rough measure of refining margins based on WTI in Cushing, Oklahoma, rose $1.10 to $15.88 a barrel, up from $12.04 on Nov. 1. The same spread in the Midcontinent, or Group 3 region, advanced $1.66 to $14.34 a barrel, according to data compiled by Bloomberg.

Group 3 covers the area north of Tulsa, Oklahoma, to Minnesota and North Dakota. Ultra low sulfur diesel in the region added 2 cents to a discount of 3 cents a gallon against Nymex futures, while Chicago ULSD dropped 0.75 cent to a discount of 3 cents a gallon.

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