Midwest Gasoline Falls to Record Low as Refineries Boost Rates

Midwest gasoline slumped to a record low as refineries process crude at record rates for this time of year.

Conventional, 85-octane gasoline in the Mid-continent, or Group 3 market was 44 cents a gallon below futures on the New York Mercantile Exchange at 2:38 p.m., the largest discount since at least 1990, according to data compiled by Bloomberg. That’s down from a 39.75-cent discount on Nov. 27.

Conventional, 85.5-octane gasoline, or CBOB, in Chicago was 48.5 cents a gallon below futures, the lowest level since Feb. 16, 2012. The discount widened 14.5 cents since Nov. 27.

“When you get RBOB futures pricing to support the export market, you get a complete disconnect with the Midwest, which is land-locked,” Steve Mosby, vice president of ADMO Energy LLC, said by phone from Kansas City, Missouri. “We’re going to keep going lower.”

Midwest refineries processed 3.62 million barrels of crude a day in the week ended Nov. 22, the highest seasonal level in Energy Information Administration data going back to 1992.

The 3-2-1 crack spread in Chicago, a rough measure of refining margins based on West Texas Intermediate in Cushing, Oklahoma, fell $5.58 to $9.88 a barrel, the lowest since Oct. 23. The same spread in Group 3 declined $2.94 to $11.

Group 3 covers the area north of Tulsa, Oklahoma, to Minnesota and North Dakota. Ultra low sulfur diesel in the region fell 2 cents to a discount of 5 cents a gallon against Nymex futures, while in Chicago the fuel dropped 1.5 cents to a discount of 4 cents.

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