Gasoline and Heating Oil Gain on Report Supply Dropped Last Week

Gasoline and heating oil rose after the industry-funded American Petroleum Institute reported U.S. product inventories fell last week and as crude gained after the conflict between Israel and Hamas militants continued.

Futures climbed for the fifth time in six days after the API reported gasoline stockpiles fell 4.81 million barrels last week and heating oil supplies declined 4.4 million barrels. U.S. Secretary of State Hillary Clinton tried to broker a cease fire between Israeli and Palestinian leaders as a blast hit a bus in Tel Aviv and air strikes on Gaza continued.

“The API stats showed a large draw across the board on inventories,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “We haven’t seen any progress on a cease fire and, with the Tel Aviv bus bombing this morning, it looks further away.”

Gasoline for December delivery rose 3.37 cents, or 1.2 percent, to $2.7462 a gallon at 9:56 a.m. on the New York Mercantile Exchange.

Futures fell the most since Nov. 7 yesterday, following crude oil lower after the state-run Middle East News Agency reported that Egyptian President Mohamed Mursi said a cease-fire was imminent.

“The market broke yesterday on hopes for a cease fire and now it looks like the bloodshed may continue,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Energy Department

The Energy Department is scheduled to report last week’s inventories at 10:30 a.m. today in Washington. The report will probably say that gasoline supplies rose 1 million barrels and supplies of distillates, including heating oil and diesel, declined 1 million barrels, according to the median estimate of 11 analysts in a survey by Bloomberg.

“The API stats were a bullish surprise,” said Flynn, whose estimate for the survey was an increase of 1 million barrels of gasoline and a 1 million-barrel distillate drop.

December-delivery heating oil advanced 3.3 cents, or 1.1 percent, to $3.0722 a gallon on the exchange, after declining 1.2 percent yesterday.

The average nationwide cost for regular gasoline rose 1.4 cents to $3.426 a gallon, AAA said today on its website. The pump price reached a 2012 high of $3.936 on April 4.

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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