Tulsa gasoline prices climb even as stocks grow: Update

Updates prices in second paragraph

Southern US midcontinent CBOB gasoline prices rose to a two-month high today even as rising inventories may have prompted regional refiners to shift some production to diesel and jet fuel.

Prices for 13.5 RVP CBOB at the Magellan Pipeline in Tulsa, Oklahoma, climbed to a 5.5¢/USG discount to the February Nymex RBOB contract, marking the narrowest spread since 1 December. The discount has declined by a combined 5.25¢/USG since 28 December, helping lift outright prices to a four-week high today at $2.24/USG, up by 2.47¢/USG in daily comparison.

Rising CBOB prices have buoyed refining margins, with the West Texas Intermediate 3-2-1 crack spread at Tulsa reaching the widest since mid-October at $17.53/bl yesterday, up by 23¢/bl from the prior session and $1.03/bl above last week's average of $16.50/bl.

The wider margins and higher CBOB prices come even as regional gasoline stockpiles build.

Midcontinent CBOB stocks rose last week to the highest since February at 34.5mn bl, up by 5.5pc from the prior week and more than 12pc above year-earlier levels, according to US Energy Information Administration (EIA) estimates. Total gasoline inventories in the midcontinent increased last week by 4.1pc to 50.9mn bl, the highest since late July. While those levels also include upper Midwest states such as Illinois and Ohio, market participants said stockpiles are especially high at Tulsa.

Rising inventories may have caused some midcontinent refiners to slash gasoline output. Finished gasoline production in the midcontinent fell from the prior week by 15.6pc to 2.1mn b/d, the lowest since late February, according to EIA data. Midcontinent crude throughput rose by 2.5pc to a three-week high of 3.9mn b/d last week, but production gains went to diesel and jet fuel amid the increase in gasoline stockpiles.

By Jared Ainsworth