US alkylate prices nosedive to record low as gasoline plummets further

Houston — US Gulf Coast alkylate barges fell to their lowest assessed level on record Monday as regional gasoline took another nosedive, demand for premium gasoline collapsed and the NYMEX RBOB futures contract fell further.

S&P Global Platts assessed alkylate barges at the lowest flat price since the assessment was launched in December, 2012.

As a flat price, alkylate barges fell 18.84 cents/gal day on day to 57.66 cents/gal Monday. As a differential to pipeline gasoline, alkylate moved 5 cents/gal lower day on day to plus 20 cents/gal.

The NYMEX April RBOB futures contract moved 19.36 cents/gal lower day on day to 41.18 cents/gal.

With poor demand for gasoline across the nation due to the coronavirus pandemic, sources said there was little incentive to blend or produce gasoline.

Benchmark conventional gasoline was assessed at its lowest level in about 21 years, down 12.84 cents/gal to 38.22 cents/gal - a 25% drop on the day.

Reformulated gasoline blendstock RBOB fell 15.84 cents/gal Monday, hitting its lowest ever level of 40.22 cents/gal.

More than 13 states were under mandatory stay-at-home orders in efforts to contain the spread of the virus, with Louisiana being the latest to join other states late Monday - accounting for nearly half of nationwide demand.

Demand for premium-grade gasoline also collapsed at the start of the week, defying previous sentiment that the worst was behind us.

Premium conventional gasoline was heard to be offered at May RBOB futures minus 0.25 cents/gal after the close Monday and bid at May futures minus 1 cent/gal.

Nationwide gasoline sentiment was bearish, with market players expecting gasoline to weaken further.

The gasoline crack to cash WTI fell $3.33/b from minus $0.98/b to minus $4.31/b Monday. The crack averaged minus $1/b over the past 15 days, compared with an average of $0.25/b in the previous 15-day period.

The weak gasoline crack has left market players in the US Gulf Coast wondering when and if regional refiners would cut rates for gasoline-producing FCC units.

"Looking at margins, they all should," a regional market source said.