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Chicago CBOB falls 10 cents/gal to $1.5418/gal on refiner selling: trade

http://www.chemnet.com   Apr 01,2015 Platts
Chicago blendstock fell more than 10 cents/gal Tuesday on refiner selling linked to differences in summer gasoline specifications in the Midwest states.

CBOB at 9 RVP was assessed at $1.5418/gal, down 10.14 cents compared with Monday's spot price and a two-week low.

CBOB has posted double-digit decreases in two of the past three trading days. It fell 11.6 cents on Friday. The blendstock has fallen on six of the last nine trading days.

"We heard ExxonMobil was out selling. Sometimes the refiners just have barrels to sell, and if they can't find a bid, especially in Chicago, they will just [keep going] until they find one," a US products trader said.

The slide did not gain steam until about noon CDT (1800 GMT). CBOB for Buckeye Pipeline delivery in the Chicago area was heard to trade at the NYMEX May RBOB futures contract minus 16 cents/gal.

But within a few hours, CBOB for delivery on the nearby Wolverine Pipeline was heard traded at 23 cents below the May futures contract and then rebid there. Offers got as low as NYMEX May RBOB minus 22 cents/gal.

Platts bases its Chicago gasoline assessments on which pipeline trades at the lowest value, the so-called "generic" barrel.

A Midwest broker said ExxonMobil was selling 9 RVP gasoline that did not meet Illinois summer specifications, and that hurt the market for the blendstock.

"If you are east of the Illinois state line, don't expect to see that [lower price] at the racks," he said.

A total of 200,000 barrels was sold during the fall in price, he said. It was not known how many of the barrels sold were from ExxonMobil, which has a refinery in Joliet, Illinois, and another in Sarnia, Ontario, Canada.

The broker also said the differential near 23 cents below the May futures contract "while real, is misleading."

ExxonMobil spokesman Todd Spitler on Tuesday said the company had no comment on its market strategy.
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