May 23rd, 2012

Gasoline Futures – California-blend gasoline in Los Angeles jumped to the highest level against futures in five days after workers at a Tesoro Corp. (TSO) refinery rejected a contract and West Coast gasoline inventories dropped last week.

United Steelworkers members at the Golden Eagle plant, Tesoro’s largest refinery, voted to reject the company’s last offer May 21 and to “initiate” a strike based on unfair labor practice, leaving it to union leaders to decide when a work stoppage would actually occur. A strike hasn’t begun and Tesoro hasn’t received notice from the union that it plans to strike, said Tina Barbee, a company spokeswoman.

“We are disappointed with the rejection of our competitive and fair offer,” Barbee, based at the company’s headquarters in San Antonio, said in an e-mailed statement. “We intend to speak with the local representatives to learn more about the outcome.”

The union local at Tesoro’s 97,000-barrel-a-day Los Angeles refinery is scheduled to decide later today whether to accept an offer from the company. Members there have been working on 24- hour, rolling extensions since their last contract was set to expire April 30. The Los Angeles and Golden Eagle refineries can process a total of 267,000 barrels of feedstock a day.

Gasoline stockpiles in the U.S. West Coast dropped 1.19 million barrels, or 4.7 percent, to 24.1 million barrels in the week ended May 18, the Energy Department said today. That’s the lowest level in the region since March 1999.

Gasoline: Carbob Rises

California-blend, or Carbob, gasoline in Los Angeles, which began trading for June delivery, rose for the first time in five days, increasing by 24 cents to a premium of 25 cents a gallon versus gasoline futures traded on the New York Mercantile Exchange, according to data compiled by Bloomberg. That’s the fuel’s largest single-day increase since Bloomberg began assessing spot prices there in November 2007.

San Francisco Carbob, which began trading for June delivery yesterday, rose 14 cents to a 25-cent-a-gallon premium to futures, the highest since May 15.

Phillips 66 (PSX) is performing a maintenance turnaround on a hydrocracker at the 76,000-barrel-a-day Rodeo refinery in Northern California that’s expected to last into June, a person with knowledge of the schedule said April 26. BP Plc (BP/) is restoring production at the 266,000-barrel-a-day Cherry Point refinery in Washington after a three-month shutdown.

Conventional, 87-octane gasoline in Portland, Oregon, jumped 40 cents to 91 cents above gasoline futures, also the highest premium and the largest single-day rise for the fuel since at least November 2007.

Low-sulfur diesel in Portland was unchanged at 20 cents a gallon above Nymex heating oil futures.

California-blend, or CARB, diesel in Los Angeles climbed 0.62 cent to 6 cents a gallon above heating oil futures. The same fuel in San Francisco was unchanged at a 4.5-cent premium to futures.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net