Southern Green Canyon crude fell to the lowest level in almost five years against domestic benchmark West Texas Intermediate with refineries in the Gulf Coast at the height of the fall maintenance season.
Marathon Petroleum Corp. (MPC:US)’s 522,000-barrel-a-day Garyville refinery in Louisiana was scheduled to shut a crude unit and a coker this month for a turnaround, a person with knowledge of the schedule said last week. Motiva Enterprises LLC’s 250,000-barrel-a-day Norco, Louisiana, refinery began turnaround work, a filing with the National Response Center showed this month. Phillips 66 (PSX:US) is performing maintenance at its Lake Charles, Louisiana, refinery, which has a 235,000-barrel-a-day capacity, according to Rich Johnson, a company spokesman in Houston.
“The overall weakness that we’re seeing in the Gulf Coast is due to the amount of turnarounds right now, which is peaking as we speak,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by phone today. “There are no hurricanes that have really impacted supply and increased oil production is overwhelming the Gulf Coast market.”
Southern Green Canyon fell $1.60 to a discount of $7.35 a barrel versus WTI at 1:56 p.m. in New York, according to data compiled by Bloomberg. It’s the largest gap since Nov. 21, 2008.
Mars Blend weakened by 80 cents to a $4.20 discount to WTI and Poseidon weakened by 90 cents to a discount of $5.
The premium for Light Louisiana Sweet narrowed by 60 cents to $1.15. Heavy Louisiana Sweet weakened by 10 cents to $1 over WTI. Thunder Horse fell to a discount of $1.25 from parity.
West Texas Sour fell $2 to a discount of $6.75. WTI in Midland, Texas, dropped $2 to a discount of $6.50.
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