High inventories depress US west coast gasoline

Growing supplies have depressed Los Angeles gasoline to its deepest discount to Nymex RBOB futures since February this year.

Los Angeles CARBOB available in December was offered at January Nymex -12¢/USG this morning, against bids 8¢/USG lower. This range marks the deepest discount to Nymex futures in nine-and-a-half months.

West coast gasoline inventories added 1.1mn bl to 29.2mn bl last week, the highest level in three months, according to data from the Energy Information Administration.

Los Angeles' relative weakness means increased pressure to export, especially at a time when Gulf coast prices are relatively stronger.

Sub-octane gasoline in Los Angeles was pegged at a 3¢/USG discount to CARBOB. The equivalent grade on the Gulf coast, Colonial pipeline CBOB, was pegged at a 4.13¢/USG premium over Los Angeles sub-octane yesterday. The two markets averaged around parity for the second-half of November.

Several vessels are currently available for booking in Los Angeles. These include the Electa, the High Sun and the Ardmore Explorer, all of which carried jet fuel from Asia to the US west coast.

But high outright prices, buoyed by strong futures, could hinder exports. Sub-octane gasoline in Los Angeles has traded above $1.4/USG since the beginning of this month, up from an average of $1.28/USG in the second-half of November.