Pacific Northwest Diesel at Seasonal Record Amid Upsets

Diesel in the U.S. Pacific Northwest is trading at a seasonal record after the region sent supplies north to aid its neighbors in Canada only to be hit with its own refinery breakdowns.

Spot diesel in Portland, Oregon, a benchmark for the Northwest, has been assessed at 40 cents a gallon above futures traded in New York for the past week, its biggest premium since Aug. 20, 2012, and the highest seasonally since at least 2007. Tugs have more than doubled their weekly voyages to Canada from the Northwest after an August shutdown at a Royal Dutch Shell Plc plant cut supplies in Alberta, according to ClipperData LLC.

Diesel’s premium in Portland has quadrupled in the past month as the region, already drained by exports to Canada, grappled with shutdowns at refineries in Washington state. Phillips 66 lost steam at the Ferndale refinery last month, and Shell’s 145,000-barrel-a-day Anacortes plant took a coker offline this week that makes diesel, said Genscape Inc., an energy data company based in Louisville, Kentucky.

“They were shipping gasoline and diesel up to Canada to help supply that market, and now they’re having to deal with their own shortage,” Bob Van der Valk, an independent energy analyst in Terry, Montana, said by telephone. “It’ll all ease up eventually when they start diverting cargoes from other places.”

At least nine tugs made voyages to ports in the British Columbia, Canada, area from the coasts of Oregon and Washington in the seven days ended Aug. 23, up from two a week earlier, said ClipperData, a New York-based commodities information provider that uses marine tracking devices to compile voyages. Tugs made six trips in the week ended Sept. 6.

Clear Trend

“We don’t know if every voyage means a full barge of petroleum was exported, but what is clear is the trend,” Abudi Zein, ClipperData’s chief operating officer, said by telephone from New York. “The number of trips by these tugs that push barges between Washington and Oregon and British Columbia ports has jumped from about two voyages a week.”

Canada has, at the same time, cut the volume of gasoline and diesel it sends to the western U.S., he said, citing Commerce Department data.

Spot gasoline in Portland slid 7.5 cents a gallon versus gasoline futures today to a 24.5-cent premium, data compiled by Bloomberg at 2:34 p.m. New York time show. Stockpiles of the motor fuel climbed 1.6 percent to 26.8 million barrels in the week ended Sept. 5.

Restarting Unit

Shell is restarting a unit at the 97,870-barrel-a-day Scotford refinery in Alberta, Canada, that was shut last month for repairs, David Williams, a Shell spokesman based in Calgary, said by e-mail yesterday. The work reduced the plant’s output and production is returning to normal, he said. Suncor Energy Inc.’s 142,000-barrel-a-day Edmonton refinery in Alberta has meanwhile begun scheduled repairs, the company said Sept. 8.

Shell’s refinery in Anacortes, Washington, started shutting a coker Sept. 7, Genscape said. The plant is performing maintenance, Ray Fisher, a company spokesman based in Houston, said by e-mail yesterday. He declined to identify the unit being repaired or how long the work will take.

Shell’s coker work follows a sulfur plant upset reported at the same refinery on Aug. 20 and a steam interruption at Phillips 66’s 101,000-barrel-a-day Ferndale plant, also in Washington, on Aug. 15 that caused it to flare gases for at least three days, filings with air regulators shows.

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