HOUSTON, Sept 3 - Wholesale gasoline in the Los Angeles market jumped 17 cents on Thursday due to heavy refiner buying amid tight supply, traders said.
Gasoline blended to meet California's strict environmental standards sold as high as 55 cents per gallon above the October RBOB contract on the New York Mercantile Exchange, traders said.
"It's just an old fashion West Coast squeeze," said one trader. "It used to happen all the time. Two years of recession markets and we haven't seen one for a while."
Major refiners were said to be buying heavily on Thursday as two San Francisco Bay-area refineries were seen taking longer than expected restarting units after planned work.
A Shell Oil Co (RDSa.L) spokesman declined to discuss operations at the company's 156,400 barrel-per-day refinery in Martinez, California, where a crude unit and a coking unit have been undergoing overhauls since mid-July. The units were expected to begin restarts by Tuesday.
A Tesoro Corp (TSO.N) spokesman said there was no update on the status of coking unit work underway at the company's 166,000 bpd Martinez refinery.
Prices were highest for gasoline to be delivered at the earliest possible date in September, with prices for gasoline to be delivered later in the month trading at lower prices.
Some refiners were surprised by tight supply this week, said a trader.
"Some refiners sold forward in anticipation of weak demand, which did not happen," the trader said. "Imports have been low and inventory is low in Los Angeles and the West Coast."
The U.S. Energy Information Administration said on Wednesday that West Coast gasoline inventories totaled 27 million barrels last week, up 300,000 barrels from the previous week.
Prices for wholesale gasoline in the San Francisco Bay market were between 2 and 5 cents per gallon on top of the Los Angeles price.
Gasoline blended to meet California's strict environmental standards sold as high as 55 cents per gallon above the October RBOB contract on the New York Mercantile Exchange, traders said.
"It's just an old fashion West Coast squeeze," said one trader. "It used to happen all the time. Two years of recession markets and we haven't seen one for a while."
Major refiners were said to be buying heavily on Thursday as two San Francisco Bay-area refineries were seen taking longer than expected restarting units after planned work.
A Shell Oil Co (RDSa.L) spokesman declined to discuss operations at the company's 156,400 barrel-per-day refinery in Martinez, California, where a crude unit and a coking unit have been undergoing overhauls since mid-July. The units were expected to begin restarts by Tuesday.
A Tesoro Corp (TSO.N) spokesman said there was no update on the status of coking unit work underway at the company's 166,000 bpd Martinez refinery.
Prices were highest for gasoline to be delivered at the earliest possible date in September, with prices for gasoline to be delivered later in the month trading at lower prices.
Some refiners were surprised by tight supply this week, said a trader.
"Some refiners sold forward in anticipation of weak demand, which did not happen," the trader said. "Imports have been low and inventory is low in Los Angeles and the West Coast."
The U.S. Energy Information Administration said on Wednesday that West Coast gasoline inventories totaled 27 million barrels last week, up 300,000 barrels from the previous week.
Prices for wholesale gasoline in the San Francisco Bay market were between 2 and 5 cents per gallon on top of the Los Angeles price.
