Chicago gasoline fell against futures for a sixth straight day as refiners offered products processed from cheaper crude with production at the highest level for this time of year in two decades.
“They don’t care about basis, they care about cracks,” or the profit margin for converting crude oil into gasoline and other products, said Steve Mosby, vice president of ADMO Energy LLC, a supply consultant in Kansas City, Missouri.
Refiners in the Midwest processed 3.37 million barrels a day, the most since 1992 for this time of year, according to the Energy Department.
The discount for conventional, 87-octane gasoline in Chicago (CHCG87PC) versus futures traded on the New York Mercantile Exchange widened 4 cents to 37.5 cents a gallon at 12:41 p.m., according to data compiled by Bloomberg. The discount was 4.75 cents on March 30. Prompt delivery rose 1.37 cents to $2.9854.
Canadian oils used by Midwest refiners returned this month to the lowest discounts to West Texas Intermediate, the U.S. benchmark crude, since October, increasing profits from producing fuel.
Refiners will keep processing more fuel until the difference narrows between WTI and European-benchmark Brent oil, Mosby said. The spread narrowed to $18.86 a barrel today from $20.21 yesterday.
The same fuel in the Midwest (GRP3G387), or Group 3, widened its discount 0.5 cents to 19.75 cents a gallon.
Valero Energy Corp. (VLO:US) restored power at the 135,000-barrel-a- day Meraux refinery in Louisiana after a blackout that shut process units. Electricity resumed at around 11 a.m. local time, about an hour and a half after it was lost, Bill Day, a San Antonio-based spokesman for Valero, said in an e-mail.
The premium for reformulated, 87-octane gasoline, or RBOB, in the Gulf Coast (MOSGR87P) held at 3.25 cents a gallon.
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