Low Run Rate Lifts Gasoline Paper, Wet Barrels in New York
CRANBURY, N.J. (DTN) -- The gasoline crack spread topped $14 bbl for the
first time since August, rallying 87% from the drop after Labor Day to today's
$14.63 bbl settlement following strong gasoline demand in September, up 0.5%
against year ago, while refinery run rates have fallen off amid seasonal
East Coast refinery runs plunged to 60.7% during the week-ended Oct. 4 data
from the Energy Information Administration shows, with the late June loss of
the 335,000 bpd Philadelphia Refining Complex partly responsible for the
region's sharply lower utilization rate.
The East Coast is product short, with the shutdown of the Philadelphia
refinery obviously increasing dependency on intra-PADD movements and imports.
Indeed, East Coast gasoline imports averaged nearly 40,000 bpd or 5.5%
higher from the end of June to early October at 745,133 bpd, reaching an
eight-year weekly high in late July at 1.072 million bpd. However, they fell
off since the Labor Day weekend against year ago, down 59,000 bpd or 8.5% over
the five week period since Aug. 30 at 632,800 bpd.
Regional gasoline supply along the East Coast is down 7.16 million bbl or
10.1% against year ago at 63.465 million bbl as of Oct. 4, EIA reports.
Against this backdrop, New York Mercantile Exchange November RBOB futures
rallied 3.62cts to a $1.6233 gallon settlement today---a two-week high. The
backwardation at the front of the forward curve also widened, as the market
reacts to a tightening supply-demand disposition.
New York Harbor F4 RBOB softened 15 points in basis to a 3.85cts premium to
the November futures contract for prompt delivery and movement on the Buckeye
Pipeline. November RBOB ratable is on offer at a 2.9cts premium to the December
The strong basis for RBOB wet barrels in the Harbor continues to illustrate
the region's tight market even though gasoline supplies nationally are 2.3%
above the five-year average.
Brian L. Milne, 1.402.255.8020, email@example.com, www.dtn.com. (c) 2019
DTN. All rights reserved.