Bloomberg News

Los Angeles Gasoline Premium Surges After Conoco Shuts Unit

October 10, 2011

Oct. 10 (Bloomberg) -- California-blend gasoline jumped to its highest premium to futures in Los Angeles since Aug. 26 after ConocoPhillips was said to shut a hydrotreater at the 147,000-barrel-a-day Wilmington refinery following a fire.

The premium for California-blend gasoline, or Carbob, in Los Angeles advanced 9.5 cents to 42.5 cents a gallon above futures traded on the New York Mercantile Exchange at 4:17 p.m. East Coast time, according to data compiled by Bloomberg.

San Francisco Carbob rose 9.5 cents to a premium of 41.5 cents above gasoline futures.

“It’s anybody’s guess how far this will go,” Bob van der Valk, an independent fuel pricing analyst in Terry, Montana, said in a telephone interview. “It could go up another 10 to 15 cents tomorrow. We’ve got an up market.”

Houston-based Conoco closed the hydrotreater, used to remove impurities from refined products such as gasoline, to assess damage after a fire in the unit yesterday, a person with direct knowledge of the incident said today.

The shutdown will affect the refinery’s ability to produce gasoline, said the person, who declined to be identified because the information isn’t public.

Chevron Corp. is conducting maintenance at the Richmond refinery that’s expected to last until mid-November.

California-blend diesel in Los Angeles strengthened 1.5 cents to a premium of 15.5 cents above heating oil futures traded on the Nymex. The premium for jet fuel in Los Angeles rose 0.75 cent to 10.5 cents.

Conventional, 87-octane gasoline in Portland, Oregon, strengthened 2 cents to a premium of 49 cents over futures, extending its highest level in at least four years.

BP Plc and Royal Dutch Shell Plc are conducting planned work at their oil refineries in Washington state.

Tesoro Corp. is still working on a residual oil unit at the Anacortes refinery in Washington that was scheduled to be completed last month, Mike Marcy, a company spokesman in Martinez, California, said in an e-mail today.

The premium for conventional gasoline to be blended with ethanol, or CBOB, in the New York Harbor region fell 1.75 cents to 9.38 cents a gallon at 4:11 p.m. East Coast time.

Conventional, 87-octane gasoline on the Gulf Coast strengthened by 0.75 cent to 4.75 cents above futures. The same fuel in Chicago fell 3 cents to a discount of 2.5 cents.

The discount for regular gasoline in the Midwest, or Group 3, fell 0.25 cent to a premium of 5.75 cents.

--Editors: Richard Stubbe, Charlotte Porter

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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