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Share Price: 510.40
Bid: 509.40
Ask: 509.50
Change: -5.40 (-1.05%)
Spread: 0.10 (0.02%)
Open: 516.30
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Low: 506.10
Prev. Close: 515.80
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UPDATE 1-U.S. gasoline futures slip even as crude bounces after China plunge

Tue, 25th Aug 2015 21:14

(Updates prices to settlement, adds byline)

By Robert Gibbons

NEW YORK, Aug 25 (Reuters) - U.S. gasoline futures fell onTuesday, pressured by a Midwest refinery unit return and theapproaching end of the summer driving season even as crudefutures rallied from 6-1/2-year lows.

The oil futures complex was hammered on Monday when plungingequities in China sparked a global selloff of shares andcommodities.

Front-month September RBOB gasoline fell 3.24 cents,or 2.2 percent, to settle at $1.4386 a gallon, after falling to a session low of $1.4313 from a $1.4942 peak.

U.S. crude and distillate futures pushedhigher.

BP Plc confirmed on Tuesday that it restarted a largecrude distillation unit that was shut on Aug. 8 for unscheduledrepairs at its 413,500-barrel-per-day Whiting, Indiana,refinery, the largest in the region.

News late last week that BP's unit would not be shut a month or more as expected weakened the cash gasolinedifferentials to benchmark futures in the Chicago and GroupThree wholesale markets in the Midwest.

Chicago gasoline differentials slid from a 54-cent premiumto September futures to finish the week even to the benchmark.

"As the refinery problems clear, the low feedstock cost ofcrude oil is going to slowly but surely eradicate the scarcitypremium that arose," said John Kilduff, partner at Again CapitalLLC.

Also curbing any bounce for gasoline futures on Tuesday wassome selling to shift into ultra-low-sulfur diesel (ULSD)futures, the benchmark heating fuel futures, as the U.S. harvestand winter fuel season approaches.

But with Labor Day holiday weekend travel still on tap thefirst weekend in September and the recent strength of U.S.gasoline demand, some analysts do not rule out somestrengthening of gasoline.

On a four-week average, gasoline demand has been runningmore than 6 percent above the year-ago period, according to datafrom the Energy Information Administration, while overalldistillate demand has lagged the year-ago period more than 3percent.

"With refinery activity in the Gulf Coast region stillrunning hot at almost 97 percent of capacity, the odds of asignificant glitch tend to increase and the probability ofextended or more extensive seasonal refinery maintenance isupped," Jim Ritterbusch, president at Ritterbusch & Associatesin Galena, Illinois, said in a note.

He expects gasoline futures to remain "highly sensitive toany additional reports of refinery issues." (Reporting by Robert Gibbons; Editing by Alan Crosby and LeslieAdler)

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