Gasoline in the U.S. Gulf Coast spot market surged to the highest level in almost two years, boosted by refinery breakdowns hitting just as plants in the region start seasonal maintenance.
Conventional, 85-octane gasoline blendstock, or CBOB, jumped for a sixth day, widening its premium versus futures traded on the New York Mercantile Exchange by 2.75 cents to 4.75 cents a gallon, data compiled by Bloomberg at 4:08 p.m. New York time show. That’s the fuel’s highest level since Oct. 9, 2012.
The rally in the Gulf, the nation’s biggest refining hub, threatens to shrink deliveries north to markets in Chicago, the U.S. mid-continent and New York Harbor and halt two weeks’ worth of price declines at the pumps. Gulf Coast refiners including Total SA are said to be performing seasonal repairs that will cut available crude-unit capacity by the most for this time of year since at least 2011, data compiled by Bloomberg show.
“We’re in a situation where there are enough refineries conducting maintenance that, if there is anything unexpected that happens, you can see prices go higher,” Michael Green, spokesman for the Heathrow, Florida-based automobile group AAA, said by telephone from Washington. “There’s not a lot of excess capacity right now. You could see gas prices, in the Southeast and the Northeast in particular, flatline.”
Valero Energy Corp.’s Corpus Christi refinery in Texas shut a unit yesterday because of mechanical issues, according to IIR Energy. Total’s 225,500-barrel-a-day Port Arthur plant, also in Texas, took oil out of its biggest crude unit on the same day for planned work, a person familiar with operations said, while asking not to be identified because the information isn’t public.
Exxon Mobil Corp.’s 344,600-barrel-a-day Beaumont complex in Texas has two fluid catalytic crackers shut for unscheduled repairs that were expected to last until mid-October, and Royal Dutch Shell Plc’s Deer Park plant in Texas cut rates in August at two crude units and a fluid catalytic cracker, according to IIR.
Crude oil processed in Gulf Coast refineries slipped 0.3 percent to 8.47 million barrels a day in the week ended Sept. 12, the lowest level since June 20, Energy Information Administration data show.
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