Gasoline weakened in the New York Harbor market after Hess Corp. (HES:US) began restarting its Port Reading refinery in New Jersey and as Europe-U.S. fuel shipments were poised to increase.
Hess expects to resume production at its 70,000 barrel-a- day Port Reading refinery by the end of the week. The plant has been shut since Oct. 29 after Hurricane Sandy cut the site’s power. Fourteen gasoline cargoes are booked to deliver supplies to the U.S. for the two weeks to Nov. 28 and another 15 will probably be hired, according to shipbrokers and traders who specialize in transporting the fuel.
Reformulated gasoline to be blended with ethanol, or RBOB, in the New York Harbor weakened by 2.75 cents to trade at a premium of 25.25 cents a gallon over futures on the New York Mercantile Exchange at 2:12 p.m. Conventional gasoline for ethanol blending, or CBOB, declined 1 cent to 23 cents.
“Anything that looks like a recovery of operations in New York Harbor is going to keep the pressure down on prices,” Carl Larry, a broker at Atlas Commodities LLC, said by phone from Houston today. “Port Reading is always at the front of the line when it comes to New York Harbor. Bayway is also a big thing people are waiting for.”
With the capacity to process 238,000 barrels a day, Phillips 66’s Bayway refinery is the largest plant around New York Harbor. The site, which also shut Oct. 29, is offline for repairs and maintenance after Sandy caused flooding and a power failure. Phillips said Nov. 5 that it planned to resume normal operations in two to three weeks.
Gasoline gained the most in more than a week on the U.S. Gulf Coast as Motiva Enterprises LLC’s 255,000-barrel-a-day Convent refinery was shut after power went out in the area, a person familiar with operations said.
Motiva’s Port Arthur, Texas, refinery is also operating at reduced rates as it repairs a 325,000-barrel-a-day crude unit. The unit may start up as early as next month, people familiar with the operations said Oct. 5.
CBOB in the Gulf Coast increased by 3.25 cents to a discount of 16 cents over futures at 2:06 p.m., the biggest rise since Nov. 2. RBOB in the region gained 2.25 cents to a 14.75- cent discount.
“If you’re buying out in the Gulf Coast, what you’re watching is the total capacity down,” Larry said.
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