U.S. Gulf Coast gasoline weakened for a fourth day against futures as refiners including Citgo Petroleum Corp. and Motiva Enterprises LLC completed maintenance at plants in the area.
Citgo’s 165,000-barrel-a-day Corpus Christi East refinery is operating at planned rates after finishing work at the Texas plant, while Motiva restarted a 325,000-barrel-a-day crude unit at the Port Arthur, Texas, refinery, following repairs, the companies said. Motiva’s pipestill, which had been idled since Dec. 11, boosted the plant’s capacity to 600,000 barrels a day from 275,000 barrels.
The return of production after maintenance may further boost supplies of distillate and gasoline products on the U.S. Gulf Coast, home to almost half of the nation’s refining capacity. Inventories of the fuels rose by a combined 4.66 million barrels last week.
Conventional gasoline to be blended with ethanol in the region weakened 2.5 cents to 19.75 cents a gallon versus futures on the New York Mercantile Exchange at 2:12 p.m. That’s the widest gap since Dec. 27 and longest losing streak since Dec. 10. Ultra-low-sulfur diesel in the region advanced 0.51 cent to 0.13 cent above heating oil futures.
“You’re getting some cheap crude down there and it will improve the crack spreads,” Steve Mosby, vice president of ADMO Energy LLC, a supply consultant in Kansas City, Missouri. “They are just going to run those refineries harder. They are making good money right now and it’s just going to get better.”
The 3-2-1 crack spread, a measure of refining profitability based on WTI in Cushing, gained 88 cents to $21.18 a barrel at 2:31 p.m. The same spread based on Light Louisiana Sweet oil rose 13 cents to $1.43 a barrel.
Refiners last week processed 7.76 million barrels of crude and other feedstocks on the U.S. Gulf Coast, where gasoline supplies grew to 83.8 million barrels last week and distillate stockpiles jumped to 39.3 million, according to data from the U.S. Energy Information Administration, the Energy Department’s statistical arm.
“The anticipation is more supply,” Mosby said in a phone interview today. “There are huge discounts on crude because Cushing is flush with supply but as you have the ability to take the barrels south, there won’t be such a discount.”
West Texas Intermediate crude for March delivery fell 1.45 cents, or 1.5 percent, to settle at $95.23 a barrel on Nymex. The discount to Brent oil, the European crude benchmark, widened to $17.57 a barrel, the largest gap since Jan. 14.
Conventional gasoline in the Mid-continent, or Group 3 region, advanced 2.5 cents to trade at a discount of 20.5 cents a gallon versus futures, the lowest since Dec. 11, according to data compiled by Bloomberg. A similar 85-octane gasoline, called CBOB, gained 1.25 cents to 27.25 cents a gallon below futures in the Chicago region.
Ultra-low-sulfur diesel held at 5 cents below heating oil futures in the Mid-continent, while the fuel retreated 0.25 cent to a 12-cent discount in Chicago.
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