Gasoline futures climbed in New York after a tornado-damaged Louisiana refinery shut a crude unit and a government report showed U.S. inventories tumbled.
Prices rose as much as 0.8 percent. Marathon Petroleum Corp. (MPC:US)’s Garyville, Louisiana, plant, the nation’s third-largest, suffered damage to a cooling tower and shut a crude unit following the tornado yesterday. Motor fuel stockpiles dropped 1.8 million barrels to 211.6 million in the week ended May 23, according to Energy Information Administration data released today.
“The Garyville issue is significant because it’s one of the largest refineries in the country and there’s still no indication of how long it’s going to be down,” said Jim Ritterbusch, president of Ritterbusch & Associates LLC in Galena, Illinois. “The market tends to price in a worst-case scenario.”
Gasoline for June delivery rose 2.44 cents to $3.0303 a gallon on the New York Mercantile Exchange at 11:21 a.m. Volume was 11 percent below the 100-day average. The more actively traded July contract advanced 2.5 cents to $3.0131. June contracts expire tomorrow.
Production of the motor fuel at U.S. refineries dropped 66,000 barrels a day to 9.5 million last week, a second consecutive weekly decline, according to the EIA, the Energy Department’s statistical unit. Plants operated at about 90 percent of capacity, the data showed.
Marathon expects to keep the crude unit at the Garyville refinery shut while it carries out repairs to the damaged cooling tower, the company said yesterday in an e-mail.
That adds to a list of maintenance under way at U.S. Gulf Coast and East Coast plants. PBF Energy Inc.’s Delaware City, Delaware, refinery began work on several units May 27, while Exxon Mobil Corp. conducts crude unit repairs in Chalmette, Louisiana, and Beaumont, Texas.
Alon USA Energy Inc.’s Big Spring, Texas, site this month shut a crude unit and fluid catalytic cracker for a turnaround. The work is expected to be complete mid-June.
Gasoline’s crack spread relative to West Texas Intermediate crude widened 42 cents to $23.20 a barrel. The premium to European benchmark Brent rose 49 cents to $16.10.
The average U.S. pump price rose 0.1 cent to $3.651 a gallon yesterday, according to Heathrow, Florida-based AAA. That’s 3 cents higher than a year ago.
Ultra low sulfur diesel for June delivery dropped 0.3 cent, or 0.1 percent, to $2.9276 a gallon. Volume was 32 percent below the 100-day average. Distillate stockpiles slid 196,000 barrels to 116.1 million, the EIA said.
The fuel’s crack spread relative to WTI narrowed 44 cents to $19.92 a barrel. The premium to Brent shrank by 43 cents to $12.84.
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