Gasoline Futures Drop in New York as Dollar Strengthens Against the Euro
Gasoline futures fell as the dollar strengthened against the euro, weakening the appeal of commodities as an investment.
Prices dropped as the dollar gained as much as 1.4 percent versus the European currency. The 16-nation currency was poised for its fourth straight weekly drop against its U.S. counterpart as Deutsche Bank AG Chief Executive Officer Josef Ackermann said Greece will require “incredible efforts” to repay its debts and may not be able to do so in full.
“We’re moving wholly in concert with what’s going on in the financial market,” said Tom Knight, vice president of trading and supply at Truman Arnold Cos. in Texarkana, Texas. The drop has nothing to do with fundamentals, he said.
Gasoline for June delivery declined 6.43 cents, or 2.9 percent, to settle at $2.1308 a gallon on the New York Mercantile Exchange, the lowest close in a week.
“The price ran up on speculation we would have a big increase in demand,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Gasoline stockpiles are ample, crude oil stockpiles are ample and there’s plenty of refining capacity. The concerns about a supply crunch have largely evaporated.”
The gasoline crack spread, or the fuel’s premium over crude, based on June contracts, widened about 9 cents to $17.88 a barrel. The spread touched $18.77 yesterday, the highest level since February 2009.
‘May Have Peaked’
“The most common time for gasoline prices to peak is in May; this year we may have peaked during the first half of the month,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “There’s at least a 50 percent chance that we’ve seen the highs of the year.”
Heating oil for June delivery sank 7.13 cents, or 3.3 percent, to $2.0606 a gallon on the exchange, the lowest level since March 15. The June crack spread narrowed about 20 cents to $14.94 a barrel.
Regular gasoline at the pump, averaged nationwide, fell 0.7 cent to $2.883 a gallon, AAA, the nation’s biggest motoring organization, said today on its website.
To contact the reporter on this story: Paul Burkhardt in New York at pburkhardt@bloomberg.net.
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