Futures sank after yesterday’s API report, which showed a 7.93 million-barrel increase in the week ended Jan. 4. The Energy Department will probably report today that stockpiles climbed 2.5 million barrels, according to the median estimate of 11 analysts in a survey by Bloomberg. Refinery utilization rose 0.25 percentage point to 90.7 percent, according to the survey.
“The decline is clearly indicative of the nearly 8 million-barrel build,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The key thing to watch is if refinery utilization remains about 5 percentage points above last year, which indicates that refiners continue to turn crude surplus into a product surplus.”
Gasoline for February delivery fell 2.27 cents, or 0.8 percent, to $2.7717 a gallon at 9:50 a.m. on the New York Mercantile Exchange, the first decline in three days.
The API reported that inventories of distillates, including heating oil and diesel, rose 5.85 million barrels. The survey projected the Energy Department will report at 10:30 a.m. today in Washington that distillate stockpiles increased 1.9 million.
Heating oil gained on speculation that refinery unit shutdowns may limit distillate supplies and that higher gasoil prices in Europe will attract diesel shipments from the U.S.
Motiva Enterprises LLC expects to take at least a week to repair a recurring leak on the 325,000-barrel-a-day crude unit at its Port Arthur, Texas, refinery, a person familiar with operations said yesterday.
Gasoil for January delivery, which expires today, rose $6.25, or 0.7 percent, to $951.5 a metric ton on the ICE Futures Europe exchange in London. Prices touched $952.25, the highest intraday level since Dec. 3.
“Heating oil is probably being drawn up by the gasoil in Europe,” Lipow said. “But, given the API stats, the market is going to wait to see if the DOE confirms those very large builds in product inventories.”
Heating oil for February delivery rose 0.63 cent to $3.0648 a gallon, the third consecutive increase.
The average nationwide retail price for regular gasoline gained 0.4 cent to $3.304 a gallon, AAA said today on its website.
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