San Francisco ULSD cash markets spiked on late Tuesday trading as Shell acknowledged an operational upset at its Bay Area refinery.
Platts assessed San Francisco ULSD at NYMEX November ULSD plus 3.45 cents/gal, down 55 points, where it was last heard talked. After the Platts Market on Close assessment process, Shell was heard to purchase a parcel of CARB diesel at plus 10 cents/gal.
"An upset in a unit at the Shell Martinez Refinery resulted in flaring of one of the refinery flares, and a Community Warning System Level 1 was activated as a precaution," Shell spokesman Ray Fisher said in an emailed statement. "Normal refinery operations continue within the other operating areas."
While Platts could not independently confirm which unit was affected by the flaring, market sources said the market spiked on the Shell news while Chevron was also the market looking for ULSD.
Shell is already working on hydrotreater at its Anacortes, Washington, refinery, tightening regional supplies.
Further south, the Los Angeles CARB diesel cash differential strengthened 2 cents after it was last heard to trade at a 75 points/gal premium to the underlying futures contract. This is the first time LA CARB diesel has been assessed at a premium to the underlying futures contract since August 13.
Much of the strength was attributed to Phillips 66's short due to production loss as it works on key units at its 139,000 b/d Los Angeles area refinery.
The planned work on its hydrotreater among other units is expected to continue until mid-October.
