Chicago CBOB climbed Monday after an abrupt rally at the end of last week, heard traded as high as NYMEX January RBOB futures plus 1.50 cents/gal on the Buckeye Complex.
The blendstock was assessed at futures plus 25 points/gal, as the Buckeye Complex premium to generic value was valued at about 1.25 cents/gal.
The last time the blendstock was assessed above the NYMEX RBOB futures contract was October 7, at 3.75 cents/gal over futures.
Buckeye Complex barrels have been more liquid than generic barrels over the last week, with the premium for the more accessible BCX barrels hovering at about 75 points/gal.
The spread widened at the start of the week as Wolverine barrels, which were heard to be very close to generic value Monday, were heard to trade at NYMEX January RBOB plus 25 points/gal and remain offered at futures plus 50 points/gal even as Buckeye Complex trade value moved upward.
Despite a generally well-supplied Midcontinent and no ongoing refinery issues, refiner bidding for end-of-year barrels has kept Chicago values strong in recent days. Combined with thin trading for the week leading up to Christmas, this has buoyed Chicago gasoline prices, a US refined products source said Monday.
Despite the abrupt surge in Chicago CBOB differentials on Monday, there was no sign that activity on the Laurel Pipeline in Pennsylvania had picked up this week.
Sources said last week as Chicago CBOB values rose that trade has increased between Chicago -- via Buckeye Complex -- and Pittsburgh, as the Pittsburgh market has recently been drawing supplies from the Midcontinent rather than from refineries in the Philadelphia area. This pull from Chicago supply has decreased liquidity for Laurel CBOB, Atlantic Coast sources said.
Traders have said the arbitrage from the Midcontinent to Pittsburgh has been open for several months, although Monday's activity may have closed the arbitrage from the Midcontinent to Pittsburgh.
Monday's Chicago CBOB strength has pushed that market above the Laurel Pipeline for the first time since October 7.
