Plentiful gasoline causes fast drop is spot prices

18 November 2011 18:00  [Source: ICIS news]

HOUSTON (ICIS)--US Gulf and Chicago gasoline prices slid steeply on an influx of supply as refineries restarted following seasonal turnarounds, said market sources on Friday.

US Gulf 13.5 Reid Vapor Pressure (RVP) unleaded gasoline prices fell from $2.6500/gal on 4 November to $2.4325/gal on 17 November, a drop of 8.2%. Chicago unleaded gasoline tumbled from $2.7000/gal on 4 November to $2.3875/gal on 17 November, a drop of 11.6%.

During the same period, gasoline futures slipped by 5.9%.

Gasoline futures settled at $2.5071/gal on 17 November, compared with $2.6634/gal on 4 November.

In both regions, gasoline fell at a steeper rate than gasoline futures.

On the US Gulf, a crude and a coker unit were restarted and nearing planned rates on 14 November following a turnaround at Valero’s 142,000 bbl/day refinery. This followed the restart of a crude unit and fluid catalytic cracker at the company’s 93,000 bbl/day Three Rivers refinery in Texas the week before.

In the midwest, BP restarted a crude and coker unit at its 405,000 bbl/day Whiting refinery in Indiana the week ended 18 November, and on 17 November, Marathon restarted an alkylation unit at its 212,000 bbl/day Catlettsburg refinery in Kentucky.

Demand averaged 8.579m bbl/day for motor gasoline in the US in the four weeks from 15 October to 11 November, compared with 9.095m bbl/day for the same four weeks in 2010, according to the US Energy Information Administration (EIA). The 2011 average was 5.7% lower than that of 2010.

The influx of gasoline in a climate of lower-than-average demand has caused a drop in prices, said market sources.

US Gulf unleaded gasoline traded at 7.50 cents/gal under gasoline futures on 17 November, compared with a discount of 1.25 cents/gal on 4 November. Chicago unleaded gasoline traded on 17 November at a discount of 12.00 cents/gal to gasoline futures, compared with a premium of 3.75 cents/gal on 4 November.

By: Sheena Martin
+1 713 525 2653

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