Gasoline Gains as Supplies Tighten, U.S. Jobless Rate Falls

Gasoline rose as refinery and pipeline shutdowns threatened supply levels and as the U.S. unemployment rate slipped to 7.8 percent in September, the lowest since President Barack Obama took office in January 2009.

Futures advanced after Valero Energy Corp. (VLO) halted spot sales in Southern California and Exxon Mobil Corp. rationed gasoline deliveries, citing tight supplies. Colonial Pipeline Co., operator of the largest conduit between Gulf Coast refiners and the East Coast, reopened two products pipelines that shut yesterday. The Labor Department reported that the jobless rate fell from 8.1 percent in August.

“The surprising drop in the overall unemployment rate caught everybody by surprise,” said Phil Flynn, vice president of research at PFGBest in Chicago. “We also still have the ongoing concerns about tightness in supply.”

Gasoline for November delivery rose 0.96 cent, or 0.3 percent, to settle at $2.9525 a gallon on the exchange. Prices fell 12 percent this week as the market switched to trading the November contract, which is based on winter-grade gasoline.

Gasoline surged 5.1 percent yesterday amid reports of the pipeline shutdown, spot shortages in Southern California and a fire at Exxon Mobil Corp.’s Baytown, Texas, refinery, the largest in the U.S.

“The markets are very tight,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consultant in London. “We have risen a lot in terms of prices.”

Jobs Report

The economy added 114,000 workers last month after a revised 142,000 gain in August that was more than initially estimated, the Labor Department said. The median estimate of 92 economists surveyed by Bloomberg was for an advance of 115,000.

Heating oil fell on speculation that refinery and pipeline shutdowns that have trimmed supply levels will be over soon.

Colonial Pipeline said today it has restarted the gasoline and diesel lines that were shut yesterday after a leak. Both lines run between Atlanta and Nashville, Tennessee.

Motiva Enterprises LLC plans to restart a damaged 325,000- barrel-a-day crude unit at its Port Arthur, Texas, refinery as early as the first week in December, according to people familiar with refinery operations.

Motiva said in July that the crude unit would start early in 2013. The unit will add to available supplies of diesel. At full capacity, the Port Arthur refinery will be able to produce 190,000 barrels a day of the fuel, according to Motiva.

“The market has exhausted itself,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

November-delivery heating oil fell 3.25 cents, or 1 percent, to settle at $3.1559 a gallon on the New York Mercantile Exchange. Futures declined 0.4 percent this week.

Regular gasoline at the pump, averaged nationwide, rose 0.5 cent to $3.789 a gallon yesterday, AAA data show. It was the third straight increase.

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

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