Benchmark US Gulf Coast CBOB and conventional gasoline fell Wednesday as much of the last stocks of winter grade gasoline was sold off and after federal government data showed a rise in regional gasoline stocks.
The same phenomenon attributed to the slow transition to spring gasoline was seen in part of the Midwest cash trade, market sources said.
Also Wednesday, line space on the gasoline-only Colonial Pipeline Line 1 from Texas to North Carolina reached positive territory for the first time in nearly a month, reflecting interest in moving cheaper fuel from the nation's refining hub eastward.
CBOB at 13.5 RVP for loading February 28 on the pipeline outside Houston was assessed at the NYMEX March RBOB futures contract minus 6.25 cents/gal, down from an assessment at 5.5 cents/gal under futures Tuesday.
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The lesser-traded conventional gasoline at 13.5 RVP fell 45 points on the day to NYMEX March RBOB minus 1.75 cents/gal, though it was heard traded as low as futures minus 2.75 cents/gal in the early part of the day.
Gasoline at 13.5 RVP was softer with the last of the winter grade expected to shipped along the pipeline in the next few weeks. S&P Global Platts will shift Gulf Coast assessments to the costlier-to-produce 11.5-RVP gasoline on Friday.
"It's that time of year again: 'El dumpo,'" a US refined products source said.
Gasoline also was weaker with the US Energy Information Administration reporting Wednesday that Gulf Coast gasoline stocks in the week ending February 10 rose 188,000 barrels to 83.39 million barrels. Fuels received no support from refinery runs down 1.3 percentage points to 84.9% last week across the region.
Line 1 space for Colonial Cycle 11 was heard traded flat and at plus 25 points. The last time it was assessed at flat or higher was January 20. Softer gasoline
usually is reflected in stronger line space as market players seek to exploit arbitrage toward New York Harbor.
Group 3 gasoline values on the Magellan pipeline system at Tulsa, Oklahoma, weakened Wednesday despite a regional draw in stocks.
"You have a refiner and marketer in the Group competing to sell barrels," the refined products source said.
The benchmark suboctane ("V-grade") market was heard to fall to levels below NYMEX March RBOB minus 3 cents/gal early in the day before shifting to an assessment at futures minus 2.50 cents/gal, down from Tuesday's assessment at 1.75 cents/gal below futures.
A Midwest refined products source cited millions of barrels of remaining winter product as a cause for the weakness in the market, considering the approach of trade in spring and summer gasoline.
Said the source: "9.1 million barrels of high RVP (gasoline) might be the reason."
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