Heating Oil, Gasoline Advance on Jobs, Manufacturing Reports

Heating oil and gasoline futures gained after indications that the U.S. jobs market is improving and that manufacturing in the U.S., Europe and China is growing, which could boost demand for motor fuel.

Futures advanced as European manufacturing expanded at the fastest pace in four months in November and China’s manufacturing rose a fourth straight month. U.S. factory output expanded for a 16th consecutive month, a report showed. U.S. employment increased the most in three years, according to figures from ADP Employer Services.

“There’s some better-than-expected data out of Europe, China and the U.S. and, when the data gets better, we start to move back up,” said Phil Flynn, vice president of research at PFGBest in Chicago.

Gasoline for January delivery added 6.2 cents, or 2.8 percent, to $2.2488 a gallon at 9:36 a.m. on the New York Mercantile Exchange.

A gauge of manufacturing in the 16-nation euro area rose to 55.3 from 54.6 the prior month, London-based Markit Economics said today. In China, the Purchasing Managers’ Index increased to 55.2 from 54.7, China’s logistics federation said today on its website.

In the U.S., the Institute for Supply Management’s factory index slipped to 56.6 in November from a five-month high of 56.9 the month before, the Tempe, Arizona-based group said today.

U.S. employment increased by 93,000 in November after a revised 82,000 gain in October, according to figures from ADP.

Dollar Falls

Futures also rose as the dollar fell for the first time in four days against the euro after European Central Bank President Jean-Claude Trichet said investors are underestimating the determination of policy makers to shore up the shared currency. A drop in the U.S. currency increases the appeal of dollar- denominated commodities to investors in other countries.

The premium of gasoline over crude oil, or the crack spread, based on January contracts, widened $1.11 to $8.85 a barrel.

Supplies of gasoline probably rose 300,000 barrels last week, according to the median estimate of 17 analysts in a survey by Bloomberg News. Stockpiles of distillates, including heating oil and diesel, probably fell 1.1 million barrels.

The Energy Department is scheduled to report last week’s inventories at 10:30 a.m. today in Washington.

Heating oil for January delivery advanced 4.44 cents, or 1.9 percent, to $2.3688 a gallon. The heating oil crack spread, based on January contracts, gained 28 cents to $13.79 a barrel.

Regular gasoline at the pump, averaged nationwide, rose 1 cent to $2.864 a gallon yesterday, AAA said on its website.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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