Gasoline Advances to 5-Week High as U.S. Jobs Market Improves

Gasoline rose to a five-week high after two reports showed the U.S. labor market may be stronger, indicating that job growth may accelerate in the second half of the year and fuel demand will improve.

Futures rose as much as 3 percent as U.S. companies added 157,000 jobs in June, according to a private payrolls report by from ADP Employer Services. The Labor Department reported that first-time jobless claims dropped by 14,000 to 418,000 in the week ended July 2.

“The market seemed to gain momentum after the ADP jobs report came out because people were surprised ADP reported as much job growth as they did,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for August delivery gained 8.05 cents, or 2.7 percent, to $3.0781 a gallon at 9:46 a.m. on the New York Mercantile Exchange. Prices touched $3.0874, the highest intraday level since May 31. Futures have risen seven of the past eight days, adding 11 percent.

Today’s Labor Department data show the four-week moving average of jobless claims, a less volatile measure than the weekly figures, fell to 424,750 last week from 427,750 in the previous seven days. A department’s report tomorrow may show overall payrolls rose by 100,000 in June, according to the median forecast of 83 analysts in a Bloomberg News survey.

API Report

The industry-funded American Petroleum Institute reported yesterday that gasoline inventories fell 1.91 million barrels last week, distillate stockpiles declined 1.63 million barrels and supplies of crude oil dropped 3.17 million barrels.

“We had momentum coming in because API showed a draw in crude and products yesterday,” said Lipow.

The Energy Department will probably report that gasoline stockpiles fell 150,000 barrels last week, according to the median estimate of 16 analysts in another survey by Bloomberg. Supplies of industrial, trucking and home-heating fuels rose 900,000 barrels, according to the survey.

The Energy Department is scheduled to report inventories for the week ended July 1 at 11 a.m. today in Washington, a day later than usual because of the July 4 Independence Day holiday.

Heating oil for August delivery added 8.15 cents, or 2.8 percent, to $3.0448 a gallon on the exchange. Prices touched $3.0496, the highest level since June 15.

Regular gasoline at the pump rose 1.4 cents to $3.583 a gallon yesterday, according to AAA data.

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

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