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Gasoline Gains on Stimulus Bets, U.S. Economic Growth

Gasoline rose the most in three weeks on speculation that central banks will boost economic stimulus measures to spur growth and as the U.S. economy grew more than forecast in the second quarter.

Futures gained 2.6 percent on the prospect for stronger demand as policy makers from the Federal Reserve, the European Central Bank and the Bank of England meet next week amid speculation they will ease monetary policy. U.S. gross domestic product rose at a 1.5 percent annual rate after a revised 2 percent gain the prior quarter. Unplanned refinery shutdowns and stronger Brent crude also boosted prices.

“The GDP is right in line with expectations,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The chatter that the Fed will do something next week is also lending support.”

Gasoline for August delivery rose 7.4 cents, or 2.6 percent, to settle at $2.8878 a gallon on the New York Mercantile Exchange, paring the weekly loss to 1.9 percent. The more actively traded September contract gained 5.97 cents, or 2.2 percent, to $2.7967.

European Central Bank President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in the coming days about a raft of measures including bond purchases, two central bank officials said today.

Futures rose from a two-week low yesterday after Draghi said the bank “is ready to do whatever it takes” to preserve the euro. German Finance Minister Wolfgang Schaeuble said he welcomed Draghi’s comments.

‘Market Buoyed’

“The market has been buoyed by the talk from Draghi and from the German finance minister, leading to speculation there will be a united front from Europe over the weekend,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

German Chancellor Angela Merkel and French President Francois Hollande today pledged to do everything necessary to protect the euro.

“We got favorable comments from Merkel and Hollande today,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “Europe brought us down strongly the first three days of the week and Europe is bringing us up strongly the last two days.”

Fed Chairman Ben S. Bernanke’s Federal Open Market Committee meets July 31 and Aug. 1, a day before Draghi’s Governing Council and Bank of England Governor Mervyn King’s Monetary Policy Committee.

Bernanke told Congress this month that the Fed is considering further options to ease policy if the faltering recovery fails to reduce unemployment. The 1.5 percent gain in the GDP, the value of all goods and services, is higher than the 1.4 percent forecast in a survey by Bloomberg.

Brent Gains

Brent oil for September settlement advanced $1.21 to $106.47 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium over U.S. benchmark West Texas Intermediate oil widened 47 cents to $16.34 a barrel, the largest difference since May 22.

A stronger Brent can boost gasoline because it raises the cost of shipments of fuel from abroad and imported oil used at U.S. refineries.

“Refinery shutdowns and the continuation of the front end of the Brent market is helping add bullish sentiment into New York Harbor,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.

Futures touched an intraday high of $2.8905 at 2:16 p.m. after a 2:11 p.m. report that BP Plc (BP/)’s 420,000-barrel-a-day Whiting refinery in Indiana may have to keep a coker shut at least two weeks and as long as four weeks to repair damage from a fire on July 23.

Heating oil for August delivery rose 2.1 cents, or 0.7 percent, to $2.8895 a gallon. Prices fell 1.2 percent this week. The September contract advanced 2.11 cents to $2.8905.

Regular gasoline at the pump, averaged nationwide, fell 0.2 cent to $3.488 a gallon, AAA said today on its website. It was the first decline since July 9. Prices have fallen 11 percent from a year-to-date high of $3.936 on April 4, according to AAA, the nation’s largest motoring organization.

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

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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