Chicago gasoline traded at a premium to futures for the first time since June 14 amid speculation that one of the five main refineries in the area may have been buying on the spot market.
Gasoline also gained in New York Harbor and the Gulf Coast on the likelihood of fewer sellers the day before the U.S. July 4 holiday.
“Chicago is stronger today and one of the refiners is probably buying,” said Jim Mosby, supply manager at ADMO Energy LLC, a supply consultant in Kansas City, Kansas. “And every market is thin before the holiday. Whereas it might usually take a few thousand orders to move the market a penny or more, today it might take only a couple of hundred.”
Conventional, 87-grade gasoline in Chicago gained 4 cents to a 2.5-cent premium to futures traded on the New York Mercantile Exchange at 12:48 p.m., according to data compiled by Bloomberg.
The major oil refineries serving the Chicago market are BP Plc’s Whiting, Indiana, plant; the Phillips 66 refinery in Roxana, Illinois; Exxon Mobil Corp.’s Joliet, Illinois, plant; Citgo Petroleum Corp.’s Lemont, Illinois, facility; and Marathon Petroleum Corp’s Robinson, Illinois, refinery.
The discount for conventional, 87-octane gasoline in the Gulf Coast narrowed 0.38 cents to 10 cents a gallon. That’s the smallest difference since June 25.
In New York Harbor, the discount for that grade narrowed 2.88 cents to 2.25 cents, the smallest discount since June 14.
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