Los Angeles spot CARBOB traded 20 cents higher early Thursday on refiner buying amid the lowest stock levels since 2008 and little sense of immediate relief, sources said.
The California-specific gasoline grade for Los Angeles traded up to NYMEX June RBOB futures plus 70 cents/gal, compared with an assessment of plus 50 cents/gal Wednesday. San Francisco CARBOB has been running 11 cents higher than Los Angeles. Portland unleaded was heard done 10 cents higher to RBOB plus 73 cents/gal.
"The market is flying," one trader said.
"You have at least two majors and one trader buying volume," another trader said. Differentials for future months are also rising, with June-delivery barrels heard done from NYMEX July RBOB plus 32 cents/gal up to plus 40 cents/gal.
US Energy Information Administration data released Wednesday showed a sharp draw in regional stocks for the fourth straight week, down 2.13 million barrels to 26.13 million barrels for the week ended Friday. That is the lowest level since 29.12 million in the week ended December 19, 2008.
Traders said just one Asian cargo of possible gasoline blendstocks was en route to the US West Coast. The quick run-up in differentials means any relief would not arrive for weeks. Los Angeles CARBOB was at plus 12 cents/gal April 27, just as three San Francisco refineries went into planned maintenance.
Traders have also noted that a sharply backwardated market in the US makes Asian exports a risky proposition. But the second trader said that with the sharp rise Wednesday and Thursday, "the dynamics have changed in regards to exporting." Ships already headed to the US East Coast, for example, could be diverted to the West Coast.
The Los Angeles CARBOB differential last reached this high on October 10, 2008, when it was plus 72 cents/gal, Platts data showed. The differential reached plus 42.5 cents/gal February 21, the first trading day after a fire shut BP's Cherry Point refinery in Washington, which is expected back online as early as the weekend.
