Gulf Coast gasoline weakened as the U.S. Energy Department approved a 1 million-barrel loan of crude oil to Marathon Petroleum Corp. to address shortages caused by Hurricane Isaac.
The loan of sweet crude oil will be returned within three months, plus premium barrels, which is similar to interest, the department said in a statement. Marathon can resume normal refining operations after running at reduced rates, Shane Pochard, a Findlay, Ohio-based spokesman, said in an e-mail.
The premium for conventional, 87-octane gasoline Gulf Coast dropped 5.5 cents to 8.5 cents versus October futures traded on the New York Mercantile Exchange at 1:55 p.m. East Coast time, according to data compiled by Bloomberg. Prompt delivery fell 0.33 cent to $3.0512 a gallon.
The oil loan, which is not a release, will be provided from the Strategic Petroleum Reserve’s Bayou Choctaw site in Louisiana.
The same fuel in the Midwest, or Group 3, strengthened 2.25 cents to a premium of 1.5 cents versus futures.
Valero Energy Corp. (VLO:US) is increasing rates at its Memphis refinery after receiving a crude oil shipment from Royal Dutch Shell Plc (RDSA)’s reopened Capline pipeline, two people with direct knowledge of operations said.
The Memphis plant, which had run at minimum levels since the pipeline shut Aug. 26 because of Isaac, is moving toward planned rates today, the people said. The 195,000-barrel-a-day plant runs primarily light, sweet oil delivered by the pipeline, according to Valero’s website.
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