Differentials for CBOB at 15 RVP on the Buckeye Complex and West Shore Pipeline in Chicago were trending abnormally far apart Thursday, which market sources attributed to refinery and scheduling issues.
CBOB on the Buckeye Complex was heard to have traded at the NYMEX March RBOB futures contract minus 3.50 cents/gal not long before CBOB on the West Shore Pipeline was heard to have traded at March futures minus 12.50 cents/gal.
"This is weird," a Midwest market source said.
S&P Global Platts does not keep a record of this spread but, most days, the Buckeye Complex-West Shore spread amounts to fewer than 4 cents/gal.
"I can't recall ever seeing [the spread] like this," a second source active in Midwest cash trading said. The sharp difference between Buckeye Complex and West Shore values may have been at least partially attributable to refinery issues east of Chicago, including at Marathon Petroleum's Canton refinery in Ohio, he added.
This explanation seems plausible, given that the Canton refinery is placed to feed refined products into the Buckeye Complex, but not into the West Shore Pipeline. Other sources were not aware of issues at this refinery and a company spokesman for Marathon Petroleum declined comment on the matter, citing company policy.
Another source said Chicago cash trading was volatile Thursday because "things got really whacked out [Wednesday]" amid the final day of scheduling for the Explorer Pipeline's third cycle of the month. On Thursday, "the marker was trying to find value" amid trading against a new NYMEX RBOB futures basis month, he said. "It's a mess right now," he added.
A fourth source agreed with that explanation, saying that West Shore values were "pounded" lower Wednesday as selling interest well exceeded bidding interest. "I expect West Shore to stay weak" Thursday, he said in the early morning.
