The differential for Houston reformate barges fell Wednesday to its lowest level against gasoline since Platts assessment began in December 2012, with interest from Asian importers waning and premium blendstock trailing strength in lower-octane gasoline on the Colonial Pipeline, sources said.
Platts assessed reformate FOB Houston for late May and early June at conventional pipeline gasoline plus 37.75 cents/gal, down 2 cents from Monday. The assessment was based on a heard offer heard at gasoline plus 38 cents/gal for reformate at 100 octane and 1 RVP.
The assessment broke the low set April 5-7 when reformate was 38 cents above gasoline.
Sources said the draw on reformate from China and other Asian customers has been lagging this spring, with those buyers having loaded up on reformate when outright prices were cheaper in January and February.
US blenders also stocked up on the blendstock at low outright prices. Unseasonably high US inventory in recent weeks is putting pressure on the market, sources said.
Meanwhile, premium CBOB (93 octane) and premium RBOB (91.4 octane) trailed increases by lower-octane gasoline in Gulf Coast cash trading. Both typically are tied to the fate of high-octane blendstocks such as reformate.
Premium CBOB for loading on the Colonial Pipeline at Pasadena, Texas, on May 31 rose point to $1.6338/gal while CBOB at 87 octane for the same date rose 2 cents. Premium RBOB rose 1 point to $1.7238/gal while RBOB at 83.7 octane also rose 2 cents.
Weakness in toluene and mixed xylene, which are extracted from reformate, also have cut into the support for reformate, sources said.
"With that octane not gaining value, there's no demand for reformate," a US refined products trader said, adding that gasoline plus 40 cents "is probably the ceiling. We're not going to see the Gulf Coast get carried away this summer."
In the summer of 2015, reformate peaked at 91 cents above gasoline in mid-July.
