Midland crude rebounds after Borger restart delay hit values

NEW YORK Wed Nov 21, 2012 12:09pm EST

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NEW YORK Nov 21 (Reuters) - Differentials for WTI Midland crude rebounded on Wednesday after dropping earlier in the week due to the delayed restart of Phillips 66's 146,000 barrel per day Borger, Texas refinery, according to analysts and trade sources.

The plant began maintenance work in late September, Phillips said at the time. Regulatory filings submitted by the company in September showed work on fluid catalytic cracking unit 40 would extend through Oct. 29, while work on FCC 29 would run from Oct. 21 to Nov. 30.

Tuder Pickering Holt & Co said in a research note that the plant had been expected to restore operations by last Monday, and that the turnaround had been extended until the weekend, helping to push the differential of Midland crude to $20 below benchmark West Texas Intermediate this week, well over levels of around $3 seen in October.

Traders said on Tuesday the grade traded as low as $22 under WTI, adding the weakness was being exacerbated by end of the month book squaring. On Wednesday, brokers said the grade had rebounded to trade at $10 under the benchmark.

Simmons & Co International said the weekend restart of the plant would be followed by a ramp-up period over several days.

The Borger refinery is a 50-50 joint venture of Phillips and Cenovus Energy Inc.

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