Bloomberg News

San Francisco Gasoline Reaches Two-Week High on Power Failure

October 28, 2011

Oct. 28 (Bloomberg) -- The premium for California-blend gasoline in San Francisco versus futures reached a two-week high after Tesoro Corp.’s Martinez refinery was said to be recovering from a power failure earlier this week.

Carbob in San Francisco rose 4.25 cents to 29.75 cents a gallon above gasoline futures at 4:13 p.m. East Coast time, according to data compiled by Bloomberg. That’s the fuel’s highest premium since Oct. 14, when San Antonio-based Valero Energy Corp. reported a breakdown at the 135,000-barrel-a-day Wilmington refinery in Southern California.

Tesoro’s 170,000-barrel-a-day Martinez refinery, north of San Francisco, was restoring production after a power failure that shut all but two units, according to a person with direct knowledge of the plant’s operations. Production should return to normal by late Oct. 31, said the person, who declined to be identified because the details of the restart aren’t public.

The premium for Carbob in Los Angeles gained 5.25 cents to 31.75 cents a gallon above futures, the highest since Oct. 17. The fuel’s premium rose 3.5 cents yesterday after San Ramon, California-based Chevron Corp. was said to be shutting a fluid catalytic cracking unit at the 279,000-barrel-a-day El Segundo refinery.

Work on the cracker is expected to last three to four weeks, a person familiar with the maintenance said earlier this week.

London-based BP Plc is also working on several units at the 266,000-barrel-a-day Carson refinery, south of Los Angeles, and San Antonio-based Tesoro was scheduled to flare at the 97,000- barrel-a-day Wilmington plant associated with scheduled maintenance.

The premium for conventional, 87-octane gasoline in Portland, Oregon, dropped 7 cents to 11 cents above futures, the lowest level since Aug. 23.

Tesoro started a fluid catalytic cracker and associated units at the 125,000-barrel-a-day Anacortes refinery in Washington, Mike Marcy, a company spokesman based in Martinez, California, said in an e-mail yesterday. The refinery had shut the units earlier this month for repairs after discovering metal cracks, known as hydrogen blistering, in equipment.

--Editors: Bill Banker, David Marino

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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