The US West Coast market is strange. Disconnected from the rest of the US, it’s a bit of a red-headed stepchild, especially for gasoline. While the Gulf Coast can send refined products up to the Midwest or Atlantic Coast via pipeline, creating natural, obvious arbitrages, no infrastructure extends westward past the Rocky Mountains. This isolation (and strict environmental mandates in California) makes the West Coast one of the most volatile gasoline markets in the world. That unpredictability was exasperated in February 2015, when ExxonMobil was forced to shut the gasoline-producing fluid catalytic cracker at its 149,500 b/d Torrance refinery after an explosion. From the time the explosion occurred through the end of August, the differential for Los Angeles CARBOB gasoline saw a day-on-day price change of at least 10 cents/gal 43 times. During the same period in 2014, the price moved at least 10 cents/gal just five times. The summer is always a busy time for gasoline markets, but that period in 2015 was a different kind of beast for the West Coast. High demand, inconsistent imports and refinery outages created even bigger daily moves than even the most experienced traders were accustomed to seeing. So, naturally, West Coast gasoline differentials
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Source: CTRM Center