West Coast gasoline differentials rose sharply Thursday, with Chevron heard buying barrels in San Francisco, where it lost a main unit to fire Monday at California's third-largest refinery.
Trades were heard Thursday at NYMEX September RBOB futures plus 38 cents/gal and plus 40 cents/gal for San Francisco CARBOB, which was assessed at plus 35 cents/gal Wednesday.
Los Angeles CARBOB, the main grade of California-specific gasoline, was heard bid to plus 29 cents/gal, or about 7 cents higher. Portland unleaded was heard done 4.75 cents higher at plus 25 cents/gal. The differentials along the coast have risen 25 to 35 cents since the fire.
Several sources said Chevron has been buying gasoline in the Bay area since its sole crude unit caught fire late Monday at the 243,000 b/d Richmond refinery near San Francisco.
"They have done lots in the Bay," one trader said.
Chevron said it was running other units at a reduced rate on feedstock like vacuum gasoil.
"It would have to be at significantly reduced rates," a second trader said. "It's tough to run without your main unit."
"Rates can't last long," the first trader added. "They have VGO coming but it won't last long."
He said Richmond may soon face a shutdown decision similar to BP's Cherry Point in Washington. BP brought forward maintenance on the other units rather than keep them running after the February 17 fire that kept it offline until late May.
"CP would have soon run out of feed, just like Chevron will," he said.
Traders were looking into gasoline imports but may wait for word on the length of Chevron's CDU outage, which is said to be weeks to months.
"I'm not really seeing a rash of imports," a third trader said, noting that exports were still scheduled to load off the West Coast to Mexico and maybe Chile. "You can't unwind commitments."
"I have not heard anything specific yet," a shipping source said. "But I imagine we would see gasoline barrels from Europe or East Coast Canada flow to the USWC ... as long as the refineries can make the California spec."
Chevron's El Segundo refinery near Los Angeles can replace some of the supply the company needs to fulfill contract obligations, sources said. The second trader said El Segundo did have "room to ramp up."
