U.S. gasoline waivers help push down post-Ike prices

By Janet McGurty

NEW YORK (Reuters) - Wholesale gasoline prices in the U.S. Gulf are declining as waivers from the U.S. Environmental Protection Agency (EPA) loosening air quality restrictions are seen easing supply, traders said on Monday.

Combined with refinery restarts after hurricanes Ike and Gustav, prompt conventional gasoline is moving down from highs of $2.50 over the October benchmark ahead of Ike to 18 cents over on Monday.

"It's trading pretty robustly on the Gulf Coast. Albeit at lower levels," said one trader.

Gasoline prices may fall further as traders said that talk that various states may extend their waivers is seen putting a damper on the trade of M3 gasoline, which is a transitional gasoline between the cleaner-burning summer grade and the heavier winter grade, and could pressure the price further.

"We heard that in October the various states may not require M3 and the market went dead," said another trader.

Seven refineries, or 9 percent of U.S. refining capacity remain shut, with 19 in various stages of restart or at reduced rates from the hurricane or supply issues.

The strong whole gasoline prices in the U.S. Gulf, which topped $5 a gallon ahead of Ike, began to draw cargoes from other regions, such as Northwest Europe, as well as diverting cargoes headed for the U.S. Northeast, the traditional landing point of most foreign cargoes.

(Reporting by Janet McGurty)