Chicago spot gasoline prices spike on increased refiner buying

11 July 2013 22:55  [Source: ICIS news]

HOUSTON (ICIS)--Gasoline spot prices in the Chicago, Illinois, market spiked on Thursday, as two refiners were buying in the market following refinery problems, market sources said.

Conventional blendstock for oxygen blending (CBOB) grade gasoline in the Chicago market was assessed at 4.50 cents/gal over NYMEX reformulated blendstock for oxygen blending (RBOB) futures, a gain of nearly 8.00 cents/gal in one day.

This put spot prices at $3.0675-3.0700/gal.

In comparison, the same grade of gasoline on the US Gulf Coast was assessed in a range of $2.8400-2.8425/gal and had a differential at a discount of 18.25 cents/gal on Thursday.

The Chicago CBOB differential had been trading at a discount to gasoline futures, dropping to 14.50 cents/gal under August RBOB futures on 5 July.

Sources said there were two buyers in the market on Thursday -- ExxonMobil and BP.

ExxonMobil had problems at its 121,000 bbl/day Sarnia refinery in Ontario, which is across the border from Detroit, Michigan, sources said.

BP was also a buyer in the market following the shutdown of a small crude distillation unit (CDU) at its 405,000 bbl/day Whiting refinery in Indiana.

In the Midwest region, there are few refineries, which can cause volatile trading if just one buyer or seller is present in the market.

Furthermore, the Midwest gasoline market has added pressure stemming from a drop in regional refinery inventories.

In the latest US Energy Information Administration (EIA) report, Midwest gasoline inventories fell from 48.4m bbl to 47.8m bbl.

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By: Anna Matherne
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