Isobutane and retail gasoline prices jump on strong alkylate

08 November 2011 21:52  [Source: ICIS news]

HOUSTON (ICIS)--Strong prices for gasoline octane booster alkylate caused a spike of 20 cents/gal for the price of its feedstock and also increased premium gasoline retail prices, said a market trader on Tuesday.

On 31 October, Mont Belvieu isobutane out of Texas had a price range of $2.0850-$2.1100/gal. Isobutane is the feedstock for alkylate production. On 7 November, isobutane prices jumped to $2.29/gal.

Buying for isobutane jumped on eagerness to make more profitable alkylate, sources said.

Market sources said alkylate, a blendstock primarily for premium gasoline, has been at least 28.76 cents/gal above spot gasoline. On 7 November, alkylate was priced around $3.01/gal.

In the past month, premium retail gasoline prices have increased to $3.905/gal from $3.795/gal, up 2.9%. DeHaan said this is likely a result of the higher octane prices.

Alkylate prices remain strong, despite falling demand for gasoline. Gasoline demand for the week of 28 October was more than 2% lower than historical norms for this time of year, according to the US Energy Information Administration (EIA).

Analyst Patrick DeHaan, of GasBuddy.com, said alkylate prices are tied into the cost of finished product from refiners. The higher cost of alkylate and isobutane does not cause a loss to the refiners because of the price to blend the alkylate, he said.

“I think the higher cost is and has continually passed on to motorists,” DeHaan said.

In the past month, premium retail gasoline prices have increased to $3.905/gal from $3.795/gal, up 2.9%. DeHaan said this is likely a result of the higher octane prices.


By: Sheena Martin
+1 713 525 2653



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