Bloomberg News

Northwest Gasoline Drops by Most in Three Years on Unit Starts

February 28, 2012

Gasoline in the U.S. Northwest tumbled by the most in three years after trading switched from February to March delivery and Tesoro Corp. (TSO) was said to be starting two gasoline-making units at the Anacortes refinery.

Conventional, 87-octane gasoline in Portland (MOGHD87P), Oregon, fell 25.25 cents to a discount of 5.75 cents a gallon against gasoline futures traded on the New York Mercantile Exchange at 4:08 p.m., according to data compiled by Bloomberg. That’s the largest single-day drop since Dec. 29, 2008, and the first time the fuel has traded at a discount to futures in eight days.

March gasoline in Portland is sold relative to April Nymex futures, which settled 18.46 cents higher than the March contract today.

Tesoro planned to introduce feedstock to the catalytic cracking and alkylation units at the 125,000-barrel-a-day Anacortes refinery in Washington state today or tomorrow, two people familiar with the plant’s operations said today. The units were shut last week after a break in an overhead line associated with the cracker, one person said.

Tina Barbee, a spokeswoman at the company’s headquarters in San Antonio, declined to comment on the units’ startup. The refinery is performing maintenance that isn’t expected to affect Tesoro’s ability “to meet our contractual supply commitments,” she said in an e-mail.

California-blend gasoline in Los Angeles (MOGLDB85) slipped for the second day, by two cents to a premium of 31.5 cents a gallon against Nymex futures. The same fuel in San Francisco (MOGSD85P) fell 0.25 cent to 27.75 cents above futures.

London-based BP Plc (BP/) finished repairs on the hydrocracker at the 266,000-barrel-a-day Carson (BPCRCRUD) oil refinery in Southern California, a person familiar with the work said yesterday. The gasoline-making unit should be back to normal production within a few days, the person said.

Chevron Corp. (CVX) flared gases at the 240,000-barrel-a-day Richmond (CTRCCRUD) refinery in Northern California late yesterday “due to low feed rates and unstability of the plant,” the San Ramon, California-based company said in a filing to the state Emergency Management Agency.

Sean Comey, a Chevron spokesman in San Ramon, declined to comment on the notice.

“We continue to supply products to our customers without interruption,” he said in an e-mail today.

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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