Bloomberg News

Chicago Gasoline Gains as Supplies Tighten for Third Week

October 25, 2012

Chicago gasoline strengthened after motor fuel supplies tightened in the area for a third week and a unit at BP’s Whiting refinery remained shut.

Stockpiles of gasoline in the region declined 193,000 barrels to 47.4 million, the lowest level since June 8, the Energy Department reported yesterday. The smallest of three crude-processing units at Whiting has been shut since Oct. 18. With a capacity of 420,000 barrels, the refinery is the largest in the Midwestern region, known as PADD 2.

Conventional gasoline to be blended with ethanol, or CBOB, in Chicago rose 3.5 cents to trade at a discount of 16 cents a gallon below futures on the New York Mercantile Exchange at 4:24 p.m. That’s the first advance in three days. Prompt delivery gained 6.43 cents to $2.4723 a gallon.

Marathon Petroleum Corp. is still undertaking maintenance activities at its 114,000-barrel-a-day Detroit refinery. The plant shut Sept. 7 for a planned maintenance turnaround that will integrate the upgrader to process heavy oil. Units are starting from Oct. 11 to Nov. 5 as part of the turnaround process, a regulatory filings shows.

Ultra-low sulfur diesel fuel in the Group 3, or midcontinent area, spanning from the Dakotas to Ohio, weakened 2 cents to 3 cents a barrel over heating oil futures, the narrowest gap since May. The same product strengthened by 0.5 cent to a 5-cent premium in Chicago.

Demand for distillate fuels, which include diesel and heating oil, dropped by 353,000 barrels to 3.53 million in the week ended Oct. 19, the Energy Deparment reported.

New York

Reformulated gasoline to be blended with ethanol, or RBOB, in New York Harbor gained 0.5 cent to 1.75 cents over futures at 3:39 p.m., the first rise in three days. Prompt delivery rose 7.84 cents to $2.6939.

Fuel shipments across the Atlantic Ocean to the U.S. are poised to remain unchanged for the two weeks to Nov. 7, according to the median estimate in a survey of six shipbrokers and traders who specialize in transporting gasoline.

Traders and oil companies booked 19 tankers along the route and 17 more will probably be hired, according to the survey. That’s the same as in last week’s survey.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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