Chicago gasoline weakened for a sixth day, the longest streak of declines since December, on speculation inventories of the motor fuel will get a boost from the restart of Exxon Mobil Corp. (XOM:US)’s Joliet, Illinois, refinery.
The premium for conventional, 85-octane gasoline slid 22 cents to 28 cents a gallon versus futures on the New York Mercantile Exchange at 2:39 p.m., the smallest premium since May 29, according to data compiled by Bloomberg.
The differential tightened 57 cents in the past six days of trading after Exxon completed maintenance at the 238,000 barrel-a-day Joliet refinery, the fifth-largest in the U.S. Midwest. The plant-wide turnaround, which began April 14, shut major operating units for the duration of the work.
Return of Joliet may boost stockpiles in the region, which Energy Information Administration data show were 152,000 barrels below the five-year average for the time of year as of May 31.
“Exxon got caught in a position where maintenance may have taken longer than expected,” Patrick DeHaan, a Chicago-based gas analyst at GasBuddy.com, said by phone. “They were caught buying between when they originally thought they’d be done and what the reality was and the market may have overreacted.”
Chicago gasoline peaked at a premium of 85 cents a gallon versus Nymex futures on June 3, the highest level in data going back to 1996.
Stockpiles of motor fuel in the Midwest, known as PADD 2, were 48.4 million barrels in the week ended May 31, after dropping to a five-month low in early May, EIA data showed.
The 3-2-1 crack spread in Chicago, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, dropped $6.71 to $34.16 a barrel.
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