Bloomberg News

California Gasoline Jumps on Unplanned Work at Valero, BP Plants

February 24, 2012

Feb. 24 (Bloomberg) -- California-blend gasoline in San Francisco and Los Angeles strengthened against futures after Valero Energy Corp. and BP Plc reported unplanned work at California oil refineries.

London-based BP is performing short-term work on equipment related to the hydrocracker at the 266,000-barrel-a-day Carson plant, California’s second-largest refinery, a person familiar with the plant’s operations said today. San Antonio-based Valero reported a malfunction in the hydrocracker at the 170,000- barrel-a-day Benicia refinery in Northern California.

Carbob in San Francisco jumped 4.5 cents to a premium of 38.5 cents a gallon versus gasoline futures traded on the New York Mercantile Exchange, according to data compiled by Bloomberg. That’s the highest premium for the fuel in San Francisco since Oct. 11.

The hydrocracker at Benicia is “back at planned rates, and there was no material impact to production,” Bill Day, a Valero spokesman at the company’s headquarters in San Antonio, said in an e-mail today. The unit had a “brief upset” late yesterday, he said.

San Antonio-based Tesoro Corp. is also performing maintenance on units at the 170,000-barrel-a-day Martinez refinery near San Francisco, Tina Barbee, a spokeswoman at the company’s headquarters, said in an e-mail today. The plant started a “major” distillate process unit yesterday, according to a notice filed with Contra Costa County regulators.

Southern California

Carbob in Los Angeles strengthened 2 cents to a premium of 41.5 cents a gallon against gasoline futures, near the four- month high of 42.5 cents reached Feb. 21.

Valero is starting units at the Wilmington refinery in Southern California after a maintenance turnaround in addition to the Carson work by BP.

In Washington, BP’s 234,000-barrel-a-day Cherry Point refinery has been shut since a fire struck the crude-processing unit Feb. 17. Tesoro shut the catalytic cracker at its Anacortes plant after an overhead line malfunctioned, a person familiar with the plant’s operations said today.

Conventional, 87-octane gasoline in Portland, Oregon, a benchmark for fuel prices in the U.S. Northwest, strengthened 3 cents to 23 cents above gasoline futures. The fuel’s premium in Oregon has risen 16.5 cents since the Cherry Point fire.

Motor gasoline inventories on the U.S. West Coast, known as the Padd 5 region, fell by the most in more than four months to 30.8 million barrels last week, the Energy Department said in a report. California inventories dropped 8.9 percent to 6.56 million barrels last week, the lowest level since Dec. 30, the state Energy Commission said.

United Steelworkers members at four of Tesoro’s refineries, Martinez, Anacortes, Kapolei in Hawaii and Salt Lake City in Utah, have now rejected the company’s last offers for new contracts, according to people familiar with the negotiations.

“Salt Lake City voted down our offer,” Barbee said in an e-mail today. “Negotiations continue at all USW-represented Tesoro refineries, and we look forward to successful ratification of all agreements.”

--Editor: Richard Stubbe

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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