November 2, 2017 / 4:49 PM / a year ago

Valero a gasoline buyer on U.S. East Coast after Pembroke outage: sources

NEW YORK (Reuters) - Valero Energy was buying gasoline cargoes for spot delivery in the U.S. East Coast after an outage at its 270,000 barrels per day (bpd) Pembroke refinery in Wales earlier this week, two trade sources said on Thursday.

Valero, the largest U.S. independent refiner, typically sells gasoline barrels from their Pembroke refinery into the New York Harbor market, traders said.

Exxon Mobil was also buying prompt gasoline barrels in the New York harbor on Thursday, traders said.

The purchases come as supplies in the U.S. East Coast have been squeezed amid lower transatlantic imports and fewer barrels being sent via pipeline from the Gulf Coast refining hub. U.S. Midwest prices have also soared, pulling barrels away from the New York harbor.

Gasoline prices in the New York Harbor have surged and traded about 6 cents a gallon above benchmark futures for delivery in December on the New York Mercantile Exchange on Thursday.

The U.S. gasoline crack spread - a key metric in refining margins - continues to surge above five-year highs seasonally. It rose as much as 7.7 percent to $20.27 a barrel on Thursday, after ending the session at around $19.79.

The 90,000 bpd fluid catalytic converter (FCC) at Pembroke was shut unexpectedly earlier this week, three trade sources said. It was not immediately clear what caused the shutdown or when the unit would be restarted.

Traders said Valero was also looking to sell vacuum gasoil, the feedstock used to feed the FCC.

A spokeswoman for the refinery declined to comment on the plant’s day to day operations.

Valero purchased the prompt barrels at 6 cents per gallon above benchmark futures, one East Coast trader said. Exxon, meanwhile, did not ship barrels over from Europe, prompting the company to buy barrels in the Philadelphia region and move it west since its Joliet plant was down.

Exxon said last week planned maintenance is continuing on several units at the 238,600 bpd Joliet, Illinois refinery.

Gasoline refining margins in northwest Europe extended their gains on Thursday on the back of the outage.

Reporting by Devika Krishna Kumar and Jarrett Renshaw in New York, Ron Bousso and Ahmad Ghaddar in London; Editing by Chizu Nomiyama and Chris Reese

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