Lower demand pressures Tulsa CBOB despite stock draw

Waning demand for summer-specification gasoline has narrowed southern US midcontinent CBOB prices to the slimmest premium to the Nymex in seven trading days.

Magellan Pipeline 9 RVP CBOB prices at Tulsa, Oklahoma, fell to a 0.23¢/USG premium to Nymex today, after reaching spreads as wide as 3.38¢/USG earlier this week.

Market participants have seen a drop in buying demand as the region prepares to transition to 10 RVP gasoline late next week. The region will shift to 11.5 RVP on 1 October.

Prices have declined despite US midcontinent CBOB inventories falling by 0.7pc to a four-week low of 30.2mn bl last week, according to US Energy Information Administration (EIA) estimates. This was down by 4.1pc from the five-year average for the first week of September.

As prices drop, arbitrage economics for shipping US Gulf coast CBOB to Tulsa have remained closed on paper since 23 August. Tulsa prices have fetched a discount to the Gulf coast two of the past five trading days even as 11.5 RVP gasoline trades in the Gulf coast.

By Jared Ainsworth