Gasoline fell on speculation that a rash of refinery glitches won’t result in lower production of the motor fuel.
Futures retreated 1.3 percent after climbing 2 percent earlier after refineries from the Gulf Coast to the Midwest reported flaring, malfunctions and power outages during the past several days. The gasoline crack spread, or the premium of the fuel over crude, narrowed.
“A rash of refinery problems seem to spark the market but the concern has gone away,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “We’re back in the shoulder season and we have plenty of supply.”
April-delivery gasoline fell 4.13 cents to $3.1622 a gallon at 10:29 a.m. on the New York Mercantile Exchange on volume that was 114 percent above the 100-day average for the time of day.
The April crack spread versus West Texas Intermediate crude on Nymex narrowed 82 cents to $41.77 a barrel. The spread against Brent oil on ICE Futures Europe Exchange slipped 66 cents to $23.04.
Yesterday, Phillips 66’s Sweeny refinery in Texas reported a power failure and BP Plc’s Toledo, Ohio, plant flared, according to filings with the National Response Center.
The Energy Information Administration reported on March 6 that gasoline supplies in PADD 1, or the East Coast, expanded 651,000 barrels to 60.5 million as of March 1, the highest level in almost a year. East Coast inventories of reformulated gasoline, or RBOB, rose 1.43 million barrels to 20.3 million, the most since March 2011.
Futures touched $3.2672 earlier, the highest intraday level since Sept. 28, and settled at a five-month high on March 8 on concern that higher prices for Renewable Identification Numbers, or RINs, that refiners must buy in lieu of blending ethanol into gasoline, may limit supplies in some areas.
The cost for RINs in 2013 surged to $1.06 a gallon on March 8, from 56 cents 7.3 cents on Jan. 8.
“The market is concerned some refiners and importers won’t be able to meet renewable fuel standard in 2013 because the RINs simply won’t be available and as a result could cause sporadic shortages in certain areas,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for March delivery declined 1.89 cents, or 0.6 percent, to $2.956 a gallon on volume that was 4 percent below the 100-day average for the time of day.
Gasoline at the pump, averaged nationwide, fell 0.2 cent to $3.696 a gallon, AAA said today on its website. Prices have fallen every day since Feb. 26.
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