Gasoline Unchanged on Tight Supply, Weak European Economy
Gasoline was unchanged, after swinging between gains and losses, as refinery work kept East Coast supplies at a four-year low even as Europe’s struggling economy threatens the global recovery and fuel demand.
Prices were stable as Irving Oil Corp. said it expects to complete planned work at the Saint John refinery by the end of the month. Futures gained 23 percent in the third quarter as plant shutdowns reduced supplies on the U.S. East Coast. Euro- area unemployment reached the highest level on record in August, according to figures from the European Union’s statistics office today.
“You’ve got record-high unemployment in Europe and refinery maintenance season can’t be expected to last more than two or three more weeks,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Gasoline for November delivery settled unchanged at $2.9201 on the New York Mercantile Exchange. Prices swung between $2.8875 and $2.9564.
Irving’s 298,800-barrel-a-day plant in New Brunswick ships more than half of its exports to the U.S. East Coast.
“There may be some anticipation that more refineries are going to be coming back from maintenance,” said Joe Posillico, senior vice president of energy derivatives at Jefferies Bache LLC in New York.
Supplies on the East Coast, including New York Harbor, the delivery point for futures contracts, are the lowest since October 2008, Energy Department data show.
Gasoline stockpiles in independent storage in Amsterdam- Rotterdam-Antwerp, Europe’s oil-trading hub, are the lowest in almost a year, according to PJK International BV.
The scarcity of available supply in the in the New York Harbor pushed the October contract up 19.77 cents, or 6.3 percent, on Sept. 28, the day the contract expired.
The Europe-to-U.S. gasoline arbitrage closed, meaning it’s no longer profitable to carry the fuel across the Atlantic Ocean, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.
Unemployment in the economy of the 17 nations using the euro was 11.4 percent in August, the same as in June and July, after those months’ figures were revised higher. The European Central Bank said last month it expects the euro-area economy to shrink 0.4 percent in 2012, down from a previous forecast of a 0.1 percent contraction. It also halved its growth forecast for 2013, to 0.5 percent.
November-delivery heating oil declined 2.34 cents, or 0.7 percent, to $3.1358 a gallon.
Regular gasoline at the pump, averaged nationwide, fell 0.1 cent to $3.782 a gallon yesterday, AAA data show. Prices have fallen 15 of the past 17 days to the lowest level since Aug. 27. Gasoline reached a 2012 high of $3.936 on April 4.
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