May 9, 2012:

HOUSTON - A brief early-morning fire at the largest refinery on the U.S. East Coast gave New York Harbor prompt cash refined products markets a jolt on Wednesday, traders said. The fire ignited in a crude distillation unit in the Girard Point section of the 335,000 barrel-per-day Sunoco Inc Philadelphia, Pennsylvania refinery and was promptly extinguished, said a company spokesman.

The company said it shut down the crude unit and launched an investigation into the cause of the fire.

Prompt F2 RBOB differentials gained 2.25 cents per gallon to 6.50/7.00 cents over the June RBOB futures contract on the New York Mercantile Exchange as buyers stepped up to cover potential shortages and downtime of the affected unit at the refinery had not been determined.

Prompt deals were done at 7.00 and 6.50 cents over, while F2 RBOB loading by May 13 was heard done at 6.00 and 5.75 cents over. However, any-May F2 RBOB differentials recovered from an earlier slump and were pegged unchanged at 1.50/2.00 cents over as cargoes from Europe and Canada were slated to arrive later in the month. Prompt and any-May ultra-low sulfur diesel also showed gains, with product talked a quarter cent higher at 7.00/7.50 cents over the June heating oil futures contract on NYMEX.

In the Midwest, Chicago diesel gallons were bid higher after the U.S. Energy and Information Administration's weekly inventory data showed regional refiners cut back capacity utilization as some plants underwent planned maintenance. Chicago ultra-low sulfur diesel was bid at 7.00 cents a gallon under the June heating oil futures contract, with offers at 6.00 cents under, trader said.

Chicago CBOB gasoline see-sawed, falling 1.50 cents a gallon to 13.50 cents under the June RBOB gasoline futures, after it traded at 12.00/10.00 cents under earlier in the day. Midwest refinery utilization fell by 4.4 percentage points to 92.7 percent, the lowest level since late March. Refineries undergoing planned maintenance in the region include Citgo Petroleum's 167,000 barrels-per-day refinery in Lemont, Illinois and Marathon Petroleum Corp's 212,000 bpd Catlettsburg plant in Kentucky.

On the Gulf Coast, conventional M2 gasoline differentials fell by 2.00 cents per gallon to 18.25 cents under June RBOB futures on the NYMEX as traders focused on a new cycle one day after pipeline scheduling. A2 CBOB differentials fell by the same amount for the same reason to a bid-offer spread of 19.00/18.50 cents under, traders said.

Gulf ULSD differentials fell by a quarter cent per gallon to 3.50 cents over June NYMEX heating oil futures. Jet fuel was steady as well, seen done at 5.00 and 5.25 cents over within Tuesday's bid-offer spread of 4.75/5.75 cents over, as its latest five-day lifting cycle scheduled to move on the Colonial Pipeline. The EIA said U.S. distillate stocks fell by 3.25 million barrels to 120.7 million barrels last week, driven largely by a drop of 1.95 million barrels in the East Coast region.

Midwest distillate stocks fell by 454,000 barrels, while Gulf Coast inventories slipped by 329,000 barrels last week, the EIA said. U.S. gasoline stocks fell by 2.6 million barrels to 207.1 million barrels, but inventories in markets east of the Rockies showed small moves. The overall decrease was driven by a drop of 2.1 million barrels in the West Coast region, the data showed. Midwest gasoline stocks fell by 260,000 barrels, while Gulf Coast stocks slipped by 252,000 barrels. East Coast gasoline inventories gained 276,000 barrels. U.S. refinery utilization rose by 0.4 percentage points last week to 86.4 percent as the dip in Midwest utilization essentially canceled out increases in other markets east of the Rockies.

East Coast utilization gained 2.8 percentage points to 83.1 percent last week, the EIA said. Gulf Coast utilization rose by 2.7 percentage points to 87 percent as Valero Energy Corp wrapped up planned work at its 292,000 bpd Port Arthur, Texas, refinery and at its 205,000 bpd St. Charles refinery in Norco, Louisiana.

By Reuters