Refinery outages, stock draw boost US gasoline
4/26/2016 12:00:00 AM
HOUSTON, April 26 (Reuters) -- US gasoline futures rallied to their highest since August on Tuesday and boosted refinery margins after a flurry of Gulf Coast refinery unit outages, buying from Venezuela and a reported drop in New York inventories.
The US gasoline crack spread rose as high as $22.55 early in the day before retreating later to $22.32, up about 3% from Monday's finish. The May RBOB contract , which expires on Friday, also rose more than 3.5% to $1.5660/gal.
Traders said the rise, which spread throughout the oil complex, stemmed largely from an early report from energy intelligence firm Genscape of a 600,000-bbl draw in East Coast gasoline stocks last week.
"It's pretty much a seasonal draw" on rising demand and sellers unloading winter-grade barrels as the New York market switches to summer grade, Genscape analyst Dylan White said.
New York Harbor F5 RBOB spot gasoline differentials climbed about 1.5 cents/gal to a penny discount to May RBOB as well, traders said.
As of April 15, the East Coast region's gasoline stocks reached 65.1 MMbbl, down nearly 10% from a 26-year high of 72.2 MMbbl in February.
In addition, Venezuela's state-run oil company launched a tender for a 300,000-bnl cargo of catalytic naphtha, a building block for gasoline, for May delivery, further fueling the bump in gasoline futures and margins.
Another factor was the string of gasoline-oriented refinery unit outages -- planned and unplanned -- in the US Gulf Coast market, according to a Reuters review.
Overall, about 3.1% of crude distillation capacity was out, along with nearly 5% of vacuum distillation capacity, 2.2% of fluid catalytic cracking (FCC) and 7% of delayed coking capacity.
That includes a shut FCC unit at Royal Dutch Shell's 316,000-bpd refinery in Deer Park, Texas, and less output from LyondellBasell's 263,776-bpd Houston refinery, where a fire damaged a coker April 8.
US Gulf Coast cash gasoline differentials also rose on Tuesday, but traders attributed those gains to pipeline scheduling more than regional outages.
Tuesday was the deadline for the last cycles to trade versus May RBOB to be scheduled to move on the Colonial Pipeline, a major fuel artery that links the Gulf Coast with the US Northeast.
(Reporting by Kristen Hays, Erwin Seba and Marianna Parraga in Houston, Jarrett Renshaw and Jessica Resnick-Ault in New York; editing by Josephine Mason and Marguerita Choy)
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