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U.S. Cash Products-Gulf Coast CBOB gasoline firms amid refiner issues, cycle change

U.S. Gulf Coast CBOB gasoline differentials strengthened on Friday amid refinery outages and as trade rolled to cycle 48 on the Colonial Pipeline, traders said. A2 CBOB gasoline firmed by 0.75 cent to trade 9.50 cents per gallon under benchmark futures for delivery in September on the New York Mercantile Exchange.

Meanwhile M2 conventional gasoline for cycle 48 on Colonial was seen weakening by a quarter of a cent to trade 3 cents per gallon below benchmark futures. The large crude distillation unit at Royal Dutch Shell Plc’s 325,700 barrel per day (bpd) joint-venture Deer Park, Texas, refinery may be shut for up to two weeks of repairs from a Thursday fire, sources familiar with plant operations said on Friday. Sources had earlier estimated the large crude unit would be shut for at least a week.

In addition, the hydrocracking unit at ExxonMobil Corp’s 560,500 barrel-per-day (bpd) Baytown, Texas, refinery shut down on Friday, one day after restarting following a two-month overhaul, said sources familiar with plant operations. In distillates, 62-grade ultra low sulfur diesel again firmed by about half a cent as several buyers emerged amid robust export demand, brokers said. F2 RBOB in the New York harbor weakened by about 0.35 cent to trade about 1.10 cents per gallon above benchmark futures. Jet fuel meanwhile, continued to soar after some early profit taking, traders and brokers said.

The squeeze in supplies is likely to last another two weeks at least, traders said as demand surpassed expectations and the Labor Day holiday weekend looms. In the Midwest markets, Group Three V grade gasoline and X-grade diesel strengthened amid pre-weekend buying, brokers said. Renewable Fuel (D6) Renewable Identification Number (RIN) credits for 2017 traded between 87.5 and 88.5 cents, relatively unchanged from between 88.5 and 88.75 cents on Thursday, traders said. They said prices of biomass-based diesel (D4) RINs for the current year were pegged at $1.08, up from $1.06 on Thursday.
Source: Reuters (Reporting by Devika Krishna Kumar, additional reporting by Jarrett Renshaw; Editing by Mary Milliken)

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