Gasoline rose for a second day as supply disruptions in the Midwest exacerbated concern that inventories of the fuel, especially the cleaner-burning reformulated blend, will be low this summer.
Refineries run by Marathon Ashland Petroleum LLC in St. Paul, Minnesota, and Citgo Petroleum Corp near St. Louis shut some units unexpectedly this week, and a tainted batch of motor fuel in Milwaukee forced several filling stations to close. Some pump prices in the Midwest rose above US$2 a gallon for a second year.
"We have low inventories making the market very sensitive to refinery outages," said Craig Gile, an energy derivatives trader at Citibank NA in New York. "Gasoline is our focus until supplies rise." Gasoline for June delivery rose US$0.132, or 1.2 percent, to US$1.0843 a gallon on the New York Mercantile Exchange. The contract gained 3.7 percent this week.
The May contract rose to US$1.163 a gallon on Monday, its last day of trading. It was the highest price in the 17 years that unleaded gasoline has been traded on the exchange. Futures represent wholesale prices.
Crude oil for June delivery fell US$0.09 to US$28.36 a barrel on the Nymex. Prices were little changed this week and are up 6 percent this year.
Refineries have been raising production in a race to make enough gasoline in the three weeks until the summer driving season starts with the Memorial Day weekend. US gasoline inventories are about 2 percent below year-ago levels.
A fluid catalytic cracker with a 70,000-barrel-a-day capacity at the Marathon refinery was the latest in a string of refinery shutdowns in recent weeks. A fire at Tosco's refinery at Wood River, Illinois, last Saturday resulted in the shutdown of a 150,000-barrel-a-day unit.
Thirteen of 102 Mobil service stations in the Milwaukee area stopped gasoline sales temporarily after discovering they had received contaminated fuel, said Lauren Kerr, an Exxon spokeswoman.
"A bad batch of ethanol was delivered to a number of terminals and we had to shut 13 stations in Milwaukee to protect our customers,'' Kerr said.
Kerr couldn't say when the stations would open.
``This just adds to the tight supply situation because refiners will have to replace it," said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp in Chicago.
Venezuela's state oil company, Petroleos de Venezuela SA, said a 77,000-barrel-a-day gasoline unit its Cardon refinery will be out of service for at least one week, which could affect production and deliveries. The refinery processes 300,000 barrels of crude oil a day, and most of its refined products are exported.
Reports of shutdowns at refineries run by Tosco in California and Conoco Inc in the UK helped spur a 23 percent rally in gasoline futures during April.
Supplies of reformulated gasoline rose 1.6 percent to 39 million barrels last week, the American Petroleum Institute said.
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