Gulf Coast gasoline strengthened to a three-week high amid upsets at the two largest U.S. refineries and as a tropical storm formed in the Gulf of Mexico, threatening to slow plant operations in the region.
Conventional, 87-octane gasoline on the Gulf climbed 3.5 cents to 10.5 cents a gallon below New York Mercantile Exchange futures at 2:30 p.m., the strongest level since Sept. 12. Conventional gasoline blendstock, known as CBOB, rose 2.88 cents to a discount of 12.75 cents.
Differentials widened after a filing showed that Exxon Mobil Corp. (XOM:US) had a malfunction on a hydrocracker compressor at the 584,000-barrel-a-day Baytown refinery in Texas, which has the second-highest crude processing capacity in the U.S. Motiva Enterprises LLC reported an upset late yesterday at a vacuum crude unit in its 600,000-barrel-a-day Port Arthur, Texas, refinery, the nation’s largest.
Tropical Storm Karen, which formed in the southeast Gulf of Mexico, is expected to be at or near hurricane strength tomorrow and could possibly disrupt operations on the coast. That may cause a decline in supplies in the region, which a government report showed gained 127,000 barrels to 79.5 million in the week ended Sept. 27.
The 3-2-1 crack spread on the Gulf Coast, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, climbed $1.73 to $8 a barrel, snapping a four-day losing streak, according to data compiled by Bloomberg. The same spread based on Light Louisiana Sweet oil, the Gulf Coast benchmark, gained $1.48 to $4.50 a barrel.
Ultra-low-sulfur diesel added 0.25 cent to a discount of 5.13 cents a gallon on the Gulf Coast, the first rise in nine days. The same fuel in New York Harbor added 0.52 cent to 0.9 cent a gallon above Nymex futures.
Reformulated gasoline blendstock, or RBOB, in New York added 0.25 cent to 1.63 cents a gallon over gasoline futures.
Planned maintenance is underway at Phillips 66 (PSX:US)’s 238,000-barrel-a-day Bayway refinery in Linden, New Jersey, the plant closest to the New York Harbor trading hub.
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