Refinery cuts continued to push up US Midwest gasoline prices Tuesday, with the Chicago market climbing 13 cents/gal.
Chicago CBOB was assessed at NYMEX March RBOB futures minus 8 cents/gal, up from Friday's assessment at minus 21 cents/gal. Platts did not assess US markets on Monday due to a national holiday.
Although federal Energy Information Administration data showed Midwest gasoline inventories reached a nearly 23-year high during the week that ended February 5, market sources said differentials climbed on refinery maintenance and reduced rates.
Valero's Memphis, Tennessee, refinery (195,000 b/d), PBF's plant at Toledo, Ohio (160,000 b/d) and Monroe's Trainer, Pennsylvania, facility (185,000 b/d) all started to pull back production last week due to higher stocks and bad economics, according to various sources.
"Sellers have backed away," a Midwest refined products broker said. "They're not keen on selling into a market where turnarounds and rate cuts are popping up like mad."
The assessment for Group 3 suboctane gasoline with 13.5 RVP (V grade) rose Tuesday to NYMEX March RBOB futures minus 8.50 cents/gal, 3.75 cents/gal higher than Friday's assessment.
By contrast, prices in the US Gulf Coast have fallen, likely due to high stocks in the Midwest and Atlantic Coast, brokers said Tuesday.
Platts assessed Gulf Coast RBOB at a 25-point premium to CBOB, its tightest spread in more than a week and 1.50 cents/gal lower than the last assessment. CBOB was assessed at NYMEX March RBOB minus 10.50 cents/gal, down 2.5 cents/gal.
"With [the Midwest] stupid cheap...maybe you are seeing barrels come down from there (virtually or actually)," a Gulf Coast trader said. "If so, that would back up RBOB in the GC, making it seem as if demand is lower."
