Los Angeles gasoline jumped to the highest level in almost three months after stockpiles of the motor fuel sank amid a series of upsets at refineries.
The fuel’s premium to futures widened after a state Energy Commission report showed California-blend gasoline, or Carbob, inventories slid for the first time in four weeks, tumbling 3.8 percent to 6.72 million barrels in the week ended Jan. 24. Chevron Corp. (CVX:US)’s El Segundo plant and Phillips 66’s Los Angeles- area refinery cut rates after upsets this week, said people with knowledge of operations at the sites.
California-blend gasoline, or Carbob, in Los Angeles jumped by 6.25 cents to a premium of 12.5 cents a gallon over futures traded on the New York Mercantile Exchange, the highest level since Nov. 5, according to data compiled by Bloomberg at 2:39 p.m. East Coast time.
The premium for Los Angeles Carbob has more than doubled in the past week on speculation that the equipment failures will cut supplies in the market at a time when U.S. West Coast refiners including Tesoro Corp. (TSO:US) and Exxon Mobil Corp. (XOM:US) are scheduled to perform planned repairs.
Exxon’s 150,000-barrel-a-day Torrance plant in Southern California will start repairs on equipment including a coker in late February, at least week ahead of schedule, a person familiar with the work said Jan. 27, asking not to be identified because the information isn’t public.
Tesoro’s 97,000-barrel-a-day Wilmington plant is also performing planned work on a hydrocracker, a person with knowledge of the schedule said.
Chevron’s 279,000-barrel-a-day El Segundo complex, the largest single refinery in California, shut the No. 4 crude unit following a Jan. 25 power failure and restored it to planned rates this week, according to a person familiar with operations there. Phillips 66 (PSX:US)’s Los Angeles plant cut rates at the fluid catalytic cracker as it worked to fix a bad pressure indicator, a person with knowledge of the upset said Jan. 28.
Retail gasoline in California was unchanged at $3.585 a gallon, according to Heathrow, Florida-based AAA.
The 3-2-1 crack spread, assuming two barrels of Carbob and one barrel of CARB diesel in Los Angeles, is refined out of three barrels of Alaska North Slope crude, widened $1.19 to $14.83 a barrel at 4:03 p.m. New York time, data compiled by Bloomberg show. The margin, a rough measure of refining profitability in the region, is the highest since Nov. 8.
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