Bloomberg News

Gasoline, Diesel Slip as Donges Start Signals French Strike End

December 23, 2013

Gasoline and diesel futures snapped rallies in New York as Total SA (TOT:US)’s Donges refinery in France restarted units after workers voted to end a strike.

Prices slipped as the 219,000-barrel-a-day Donges plant operated by Total SA, France’s largest oil company, was gradually starting units, the Paris-based company said today in a statement. Strikes continue at the Feyzin, Gonfreville and La Mede sites, which halted operations last week, according to Christian Votte, a CGT union official.

“The market expects the three strikes that are still under way will get settled rather quickly,” Andy Lipow, president of Lipow Oil Associates LLC, said by phone from Houston. “When the refineries shut down, that reduced the amount of gasoline that was available for export to the U.S. while simultaneously boosting demand for diesel exports. The opposite effect occurs when they return.”

Gasoline for January delivery fell 0.3 cent to $2.7801 a gallon on the New York Mercantile Exchange at 10:01 a.m., heading for the first decline in six days. Trading volume was 22 percent lower than the 100-day average for the time of day.

The fuel’s crack spread versus West Texas Intermediate Oil, a rough measure of refining profitability, widened 28 cents to $17.92 a barrel. Gasoline’s premium to Brent oil in Europe narrowed 24 cents to $5.17 a barrel.

Ultra low sulfur diesel for January delivery slipped 0.69 cent to $3.0712 a gallon, snapping a three-day rally on volume that was 44 percent below the 100-day average. The crack spread relative to WTI gained 12 cents to $29.75 a barrel, while the fuel’s premium over Brent increased 4 cents to $16.95.

The average U.S. pump price rose 0.6 cent to $3.25 a gallon yesterday, the fourth consecutive advance, according to Heathrow, Florida-based AAA, the nation’s largest motoring company.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

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


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Companies Mentioned

  • TOT
    (Total SA)
    • $57.7 USD
    • 1.78
    • 3.08%
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