Futures fell for the first time in three days after China, the world’s biggest energy consumer, raised gasoline and diesel costs by the most in more than two years. The International Monetary Fund said Greece many need additional funding.
“There’s more concern about Greece today, speculation it may need another bailout,” said Phil Flynn, vice president of research at PFGBest in Chicago. “There is a lot of concern about slowing China growth and that demand for fuel will slow.”
Gasoline for April delivery fell 0.47 cent to settle at $3.3631 a gallon on the New York Mercantile Exchange.
China raised fuel prices for the second time in less than six weeks. Refiners will charge 7 percent more for gasoline and 7.8 percent more for diesel, the biggest price increases in more than two years, according to data compiled by Bloomberg. China on March 5 reduced its growth target to 7.5 percent for 2012, after projecting 8 percent yearly growth since 2005.
Greece, whose credit crisis has threatened the euro- region’s economy, got approval last week from euro-area member states for a second bailout package.
Gasoline has surged 25 percent this year, becoming the best performer in the Standard & Poor’s GSCI index of 24 commodities, on higher crude prices and refinery shutdowns even as pump prices climbed 17 percent and demand has declined. Crude oil on the Nymex has gained 6.9 percent and heating oil 10 percent.
“The gasoline market is in its own world right now and you won’t see relief at the pump any time soon,” said Ray Carbone, president of Paramount Options Inc. in New York. “The raw material cost has already lifted gas prices and then you have refinery shutdowns. Everything is conspiring to support gasoline.”
Retail demand this year through March 16 was 5.6 percent lower than a year earlier, according to MasterCard Inc.’s SpendingPulse report today. That’s the biggest drop for this time of the year in MasterCard records, dating back to July 2004. Measured on a four-week average, fuel use has been below year-earlier levels for 51 consecutive weeks.
Futures pared losses after touching $3.3187 a gallon as supplies tightened before peak demand season. Gasoline stockpiles probably slumped for a fifth consecutive week in the seven days ended March 16. Inventories (DOEASMGS) shrank 2 million barrels last week, the median of 11 analysts surveyed by Bloomberg News.
Diesel and heating oil stocks declined 1.5 million barrels, according to the survey.
Heating oil for April delivery fell 2.46 cents, or 0.8 percent, to settle at $3.2367 a gallon on the exchange.
Regular gasoline at the pump, averaged nationwide, rose 0.4 cent to $3.846 a gallon yesterday, according to AAA, the nation’s biggest motoring group. Prices are 8.4 percent higher than a year ago. Gasoline peaked in 2011 at $3.985 on May 4.
To contact the reporter on this story: Barbara J Powell in Dallas at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org