Gasoline Rises as Home Prices, Consumer Confidence Climb
(Corrects month of consumer confidence report in first paragraph.)
Gasoline advanced as U.S. home prices rose more than expected in July and American consumer confidence jumped to a seven-month high in September.
Futures gained as the S&P/Case-Shiller index of property values in 20 cities increased 1.2 percent from July 2011, the biggest 12-month jump since August 2010, a report from the group showed today in New York. Gasoline widened gains after the Conference Board’s index of consumer confidence increased to 70.3 from 61.3 in August.
“We’ve gotten a break in gasoline prices lately and now a rebound in home prices and those two factors are making people feel a little bit better,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Gasoline for October delivery rose 3.57 cents, or 1.2 percent, to $2.9533 a gallon at 11:29 a.m. on the New York Mercantile Exchange.
The median forecast of 23 economists surveyed by Bloomberg called for a 1.1 percent gain in housing prices.
The group’s measure of present conditions increased to a five-month high of 50.2 from 46.5 in August. The measure of expectations for the next six months advanced to 83.7, the highest since February, from 71.1.
The portion of respondents in the Conference Board survey expecting more jobs to become available in the next six months climbed to 18.5 percent, the highest since February, from 15.8 percent the previous month. The proportion of consumers who expect their incomes to rise over the next six months rose to 16.3 percent, the highest level this year, from 16 percent in August.
Stocks extended gains after the figures, with the Standard & Poor’s 500 Index (SPX) advancing 0.4 percent to 1,462.29 at 11:17 a.m. in New York.
“That report was clearly bullish,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Stocks ticked up and so did the oil market.”
Futures were up before the two reports as crude oil rose after Fars, Iran’s state-run news agency, reported that Iran fired four missiles in the Persian Gulf as part of a war game. Iranian President Mahmoud Ahmadinejad, who is scheduled to speak before the UN tomorrow, said in a U.S. television interview yesterday his nation will defend itself if attacked by Israel.
“The oil market was supported when we saw that Iran fired some test missiles over the weekend,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Now, the U.S. economic numbers have provided some measure of support to the oil market.”
Regular gasoline at the pump rose 0.2 cent to $3.81 a gallon yesterday, AAA data show. It was the first increase in 11 days. Prices reached a 2012 high of $3.936 on April 4.
October-delivery heating oil advanced 1.67 cents, or 0.5 percent, to $3.1154 a gallon on the exchange.
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