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Low Run Rate Lifts Gasoline Paper, Wet Barrels in New York
10/10 4:39 PM
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 maintenance. 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 contact. 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, brian.milne@dtn.com, www.dtn.com. (c) 2019 DTN. All rights reserved.