Aromatics blend values fell Wednesday on the back of sharp declines in premium gasoline prices. Conventional blend values fell 24 cents Wednesday, finishing near 188 cents/gal, according to S&P Global Platts estimates.
The decline comes as premium gasoline prices fell sharply following the release of unfavorable gasoline inventory by the US Energy Information Administration. The data showed US Gulf Coast stocks of gasoline hit a multiweek high in the week ended August 11, even as US exports surged to highs not seen since June.
USGC gasoline inventories rose 186,000 barrels to reach 81.96 million barrels during the week. Inventories were last greater in the week ended June 30, when they were reported at 82.64 million barrels, the EIA data showed. This led to downward pressure, which saw premium conventional (V-grade) gasoline shed 8.5 cents day on day, and narrowed regrade (the spread between premium and regular gasoline) values to 8.95 cents.
The implications for the US toluene and xylene markets could be significant as blend value and reformer economics have lent support to higher pricing as of late. Sources characterized both the toluene and xylene markets as well-balanced, and the prevailing sentiment seems to be that prices should move lower headed into in September as demand from gasoline blenders wanes.
With the decline in blend values, support would have to come from chemical demand, sources said. As of close of business Wednesday, support from the chemical segment seemed unlikely as toluene-based chemical production margins inched lower.
US toluene disproportionation margins were down about $25 from this time last week, estimated at near $74.50/mt, while Mobil selective toluene disproportionation margins were down near $15 during the same period, estimated at near $55.75/mt. Margins from these units could improve if recent gains in benzene persist, although toluene and mixed xylenes still face further pressure with the pending restart of the reformer at Citgo's Lake Charles, Louisiana, refinery during the second half of August, sources said.
