NEW YORK (Reuters) - Philadelphia Energy Solutions Inc was in the market for gasoline after the company shut a gasoline-making unit at the Girard Point section of its Philadelphia refinery complex, according to traders.
Gasoline prices rose almost 2 percent, before easing.
That PES was said to be buying gasoline would suggest it is bracing for a longer shutdown, two market participants said, as they would need that product to meet customer agreements.
It comes after two people familiar with the plant’s operations said Thursday that plans were underway to restart the 85,000 barrel-per-day gasoline-making unit at the Girard Point section of its Philadelphia refinery complex within 24 hours.
The unit shut down on Wednesday evening when an associated air-blower failed, a second person said.
A PES spokeswoman declined to comment, saying the company does not discuss day-to-day operations.
U.S. gasoline futures rose on news of the outage at the refinery complex, the East Coast’s largest. Gasoline futures climbed more than 2 cents to a high of $1.34 a gallon in early trading before pairing gains to trade up 0.06 cents per gallon at $1.3220 a gallon.
Another market participant said the company may also be trying to unload vacuum gas oil, which they will be unable to process into other products if the outage is extended.
The U.S. gasoline crack spread, a key element in determining refining margins, climbed above 5 percent to a high of $14.23 per barrel in early trading on Thursday.
Gasoline margins have recovered over the last few days after hitting their lowest since February at about $11.50 per barrel early this month. However, they are seasonally at their lowest levels in about six years.
Reporting By Jarrett Renshaw and Devika Krishna Kumar, additional reporting by Jessica Resnick-Ault; Editing by Dan Grebler and Alan Crosby