Gasoline and heating oil sank along with crude oil as the euro slid on concern that Europe’s debt crisis may worsen after a levy on Cyprus bank savings.
Gasoline futures tumbled as much as 2 percent and heating oil fell as much as 1.6 percent as the euro lost the most since December 2011 against the dollar after the euro area forced depositors in Cyprus to share in the cost of the country’s bailout. A stronger dollar reduces the investment appeal of commodities.
“I’m pegging this decline all toward the dollar because this Cyprus issue seems to have pushed the dollar up and the euro down,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Gasoline for April delivery fell 4.19 cents, or 1.3 percent, to $3.1219 a gallon at 9:46 a.m. on the New York Mercantile Exchange. Trading volume was 39 percent below the 100-day average for the time of day. The contract is for reformulated gasoline to be blended with ethanol, or RBOB.
Cypriot President Nicos Anastasiades bowed to demands by regional finance ministers to raise 5.8 billion euros ($7.48 billion) by imposing losses on depositors in the island’s banks.
“There’s concern that the crisis in Cypress would have a ripple effect throughout other countries in Europe and we’re seeing a selloff in equities and commodities,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for April delivery declined 3.5 cents, or 1.2 percent, to $2.904 a gallon on volume that was 41 percent below the 100-day average for the time of day.
Gasoline at the pump, averaged nationwide, fell 0.1 cent to $3.685 a gallon, AAA said today on its website. Prices are 15.3 cents below a year ago and have dropped 10.1 cents from the year-to-date high of $3.786 on Feb. 26.
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