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Share Price: 503.70
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Change: -6.70 (-1.31%)
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Open: 506.40
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BP's Indiana refinery outage drives gasoline up, widens oil spreads

Mon, 10th Aug 2015 17:14

NEW YORK, Aug 10 (Reuters) - BP Plc (BP.L) has shut a keycrude processing unit at its 405,000-barrels-per-day WhitingRefinery in Indiana, pushing gasoline prices sharply higher andwidening U.S. crude's discount to the global benchmark Brent.

The front-month West Texas Intermediate (WTI) contract inU.S. crude also traded at its lowest to the second-month in three weeks as concerns over the Whiting refineryweighed on prompt oil.

The 240,000 bpd pipestill 12 section at Whiting, the largestof three crude processing units at the refinery, has been closedsince Saturday morning, sources familiar with the situationsaid, confirming a report by energy industry intelligenceservice Genscape.

The crude unit is responsible for the initial refining ofoil coming into a refinery and provides feedstocks for all otherunits.

BP spokesman Scott Dean declined to discuss operations atthe refinery when contacted by Reuters on Monday.

Genscape reported that other CDU at Whiting were operatingnormally.

WTI's front-month was up 75 cents, or 1.7 percent, at $44.62a barrel at 12:30 p.m. ET (1630 GMT). But against thesecond-month , it traded almost 60 cents lower, thebiggest discount since July 14.

The Brent-WTI spread , another key trade in oil,moved back to the $5-per-barrel level in Brent's favor for thefirst time in 10 days.

RBOB gasoline futures, meanwhile, jumped more than 3percent to above $1.68 a gallon, heading for their largest dailygain in a month, on news of the outage.

Just last week, the market fell almost 12 percent, itsbiggest weekly decline since September 2009, after U.S.government data showed a larger-than-expected build in gasolinestockpiles.

Group Three cash gasoline traded at 1 cent over front-monthSeptember U.S. RBOB gasoline futures on Monday, a 6-centstronger differential to the benchmark as traders and brokersreacted to news of crude distillation unit (CDU) repairs at BP'sWhiting refinery.

Group Three gasoline was valued at 5 cents under thebenchmark late on Friday.

Pipestill 12 was the centerpiece of a $4 billion refit ofthe Whiting refinery to run greater amounts of crude fromCanada's oil sands in Alberta. The rebuilt Pipestill 12 beganproduction in July 2013. (Reporting by Barani Krishnan, Erwin Seba, Robert Gibbons andCatherine Ngai; Editing by Alan Crosby)

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