Gasoline Output in West Jumps to Record on Blending, Exports

Gasoline output in the western U.S. jumped to a record as refiners and blenders boosted production to meet stricter environmental regulations and tankers were seen exporting fuel from the region.

Finished gasoline on the U.S. West Coast, known as the PADD 5 region, rose 6.7 percent to 1.75 million barrels a day in the week ended April 4, the highest production rate in Energy Information Administration data back to 1993. California imposes more stringent limits on Reid vapor pressure, a measure of gasoline volatility, from April through October.

“They’re getting ready for the summer blend, so it makes sense to us that they’re blending more,” Rob Merriam, who manages monthly and weekly petroleum supply statistics for the EIA, said by telephone from Washington. “It’s definitely the blenders that are doing it and not the refiners.”

Last week’s surge in gasoline production in the western U.S. was almost double the increase nationwide, EIA data show.

Close to three-fourths of finished gasoline is now produced by blenders in the U.S., according to Merriam. While regional output increased, gasoline produced by refineries in California slipped 0.1 percent to 7.47 million barrels last week, state Energy Commission data show.

Eleven tankers were chartered to export clean products off the West Coast in the past month, up from two tankers during the same period last year, ship-fixture data compiled by Bloomberg show. Gasoline exports from the region rose 6.9 percent to 2.36 million barrels in January, a record high for the month, according to EIA data.

“I don’t think people are driving more here, so if this isn’t because of demand, then it does leave you to wonder if it isn’t all exports,” David Hackett, president of energy consulting firm Stillwater Associates in Irvine, California, said by telephone.

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