USGC refiners hold onto their gasoline, as Midwest refiners seek supplies

Houston (Platts)--28May2015/406 pm EDT/2006 GMT

On the backdrop of the severe storms in East Texas, US Gulf Coast refiners are holding onto gasoline barrels at the same time distressed Midwestern buyers are looking to bring supplies north, Gulf Coast trading sources said Thursday.

"I heard only one seller is out there," one source said.

A second source said he had heard of Midwest buyers sourcing barrels for both Chicago and Group 3, "with refiners hoarding" their stocks in the USGC.

Several Midwest refiners have been experiencing production problems. The market has known about issues at ExxonMobil's Joliet, Illinois, refinery and Citgo's Lemont, Illinois, refinery for several days, and talk began circulating Thursday of issues at PBF's Toledo, Ohio, refinery.

It looks likely that refiners with production problems would be looking to source barrels in the Gulf Coast to cover their system demands, a Midwest brokering source said.

Gulf Coast CBOB spiked higher in trading Thursday morning. CBOB started the day at the NYMEX July RBOB futures contract minus 14.50 cents/gal and hit a high of minus 11.50 cents/gal before dipping back amid thin trading in the afternoon.

Chicago pipeline CBOB was heard traded at minus 4.50 and minus 4 cents/gal Thursday, up 1.25 cents from Wednesday.

"It's strong," a Chicago gasoline trader said.

The Gulf Coast market appeared to largely ignore published Energy Information Administration data on gasoline stocks. Stocks remained rangebound for the fourth consecutive week, the data showed, as regional refineries continued to amp up output. Inventories stood at 76.75 million barrels in the week ended May 22, up 234,000 barrels from the previous week.

Gulf Coast refineries appeared to overcome some production issues to raise their capacity utilization to 95% of available capacity, up 1.9 percentage points from the previous week.

--Amanda Rayborn, amanda.rayborn@platts.com
--Edited by Richard Rubin, richard.rubin@platts.com

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