Gasoline Gains for First Time in Four Days, Pump Prices Rise

Gasoline rose for the first time in four days and pump prices edged closer to last year’s highs. Crack spreads and the April contract’s premium to later months increased.

March futures advanced as much as 1.6 percent. The Energy Information Administration said yesterday supplies sank 2.88 million barrels last week as refinery rates and imports declined while demand increased. Average retail prices have jumped 15 percent this year to within 15.5 cents of last year’s high of $3.936, according to AAA data.

“Gasoline has been rallying since the EIA showed a bigger- than-expected draw in gasoline inventories and refinery utilization dropped as we’re in the midst of the refinery maintenance season,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “But higher pump prices will definitely put a damper on consumer spending.”

March-delivery gasoline rose 2.89 cents to $3.0654 a gallon at 9:54 a.m. on the New York Mercantile Exchange on volume that was 25 percent above the 100-day average for the time of day.

The fuel is up 9 percent this year, the second-best performer on the Standard & Poor’s GSCI index of 24 commodities, after cotton.

The April crack spread, or premium of gasoline over West Texas Intermediate crude on Nymex, widened 80 cents to a record $43.79 a barrel. Against Brent oil on ICE Futures Europe, the spread gained 23 cents to $22.53 a barrel. The April-September gap widened 1.3 cents to 28.25 cents a gallon.

Stopped Decline

“We stopped the decline,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “But fundamentals are about the change for gasoline. Production is set to rise fairly dramatically over the next couple of months and these high pump prices are not going to be encouraging for demand.”

U.S. refinery seasonal maintenance typically peaks in March and April.

Retail gasoline, averaged nationwide, rose 0.3 cent to $3.781 a gallon, AAA, the largest U.S. motoring club, said today on its website. It was the smallest gain since Jan. 27. Pump prices are up every day since Jan. 17, advancing 48.8 cents.

Refineries used 82.9 percent of capacity last week, down 0.9 percentage point from the prior week and the lowest level in 11 months. Gasoline imports slipped to a four-week low.

Demand, measured by deliveries to wholesalers, rose 0.4 percent to 8.44 million barrels a day. Demand over four weeks was 2.8 percent above a year earlier.

Heating oil for March delivery gained 0.67 cent to $3.1024 a gallon on volume that was 28 percent below the 100-day average.

To contact the reporter on this story: Barbara 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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