Bloomberg News

Los Angeles Gasoline Premium Plunges as Contract Trades for July

June 21, 2013

Spot gasoline in Los Angeles tumbled to a four-day low versus futures as the prompt-month contract began trading for July and upsets at California refineries were seen as short-term.

California-blend gasoline, or Carbob, in Los Angeles, now trading against August gasoline futures on the New York Mercantile Exchange, dropped 33.5 cents to a premium of 27.5 cents a gallon at 4:02 p.m., data compiled by Bloomberg show.

The fuel soared to an eight-month high of 62.5 cents a gallon above futures June 19 after Exxon Mobil Corp. (XOM:US)’s 150,000-barrel-a-day Torrance refinery shut its crude unit for repairs. Carbob’s premium is at the highest level for this time of year since at least 2008, when Bloomberg began compiling data for the season.

The June 19 price boost “sounds like a classic short-squeeze,” Dave Hackett, president of energy consultant Stillwater Associates, said by e-mail from Irvine, California. “Somebody was short and had a deadline. It took 65 cents per gallon over to get a supplier to sell.”

The crude unit at the Torrance refinery in Southern California is expected to remain down for one to two weeks, a person familiar with operations there said yesterday. Other equipment at the plant is running at about half of normal capacity during the repairs, related to a metallurgical issue, the person said.

Prompt-delivery of Carbob in Los Angeles sank 37.55 cents to $3.0217 a gallon.

San Francisco

In San Francisco, the fuel weakened 22.5 cents against futures to a premium of 23.5 cents a gallon.

The discount for San Francisco Carbob versus the same fuel in Los Angeles narrowed 11 cents to 4 cents a gallon, the smallest differential in more than a week.

The fluid catalytic cracker at Royal Dutch Shell Plc (RDSA)’s Martinez refinery in Northern California may remain shut for five to six days, according to a filing from Contra Costa County regulators. The FCC, which processes vacuum gasoil into gasoline or lighter crude products, was taken out of service June 19 after a boiler tripped offline, the notice shows.

All three boilers at the Martinez plant are down, according to the filing.

Tesoro Corp. (TSO:US)’s Golden Eagle refinery near Martinez is running normally after a “brief power outage” June 19, Megan Arredondo, a spokeswoman at the company’s headquarters in San Antonio, said by e-mail today.

“There was no impact to operations or our ability to meet product supply commitments,” she said.

Retail Gasoline

Retail gasoline in California jumped 3.9 cents to $4.046 a gallon, Heathrow, Florida-based AAA, the nation’s largest motoring organization, said today on its website. Prices are up from $3.929 a gallon a year ago.

The premium for spot, conventional gasoline in Portland, Oregon, which is still trading for June, gained 2 cents against futures to a premium of 16 cents a gallon.

Portland gasoline’s discount to Los Angeles Carbob narrowed 35.5 cents to 11.5 cents a gallon, the smallest gap in a week.

The 3-2-1 crack spread of Alaska North Slope crude, Carbob in Los Angeles and CARB diesel in Los Angeles tumbled $10.78 to $21.51 a barrel at 3:57 p.m. New York time. The spread, a rough indicator of short-term refining margins, jumped June 19 to the highest level since Oct. 9.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

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


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Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $103.18 USD
    • -1.10
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  • TSO
    (Tesoro Corp)
    • $60.15 USD
    • 0.34
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