Gasoline Declines on Supply Increase; Discount to ULSD Widens

Gasoline fell, crack spreads narrowed and the motor fuel’s discount to ultra-low-sulfur diesel widened after a report that gasoline supplies increased last week.

Futures weakened after the industry-funded American Petroleum Institute reported yesterday that gasoline stockpiles rose 1.96 million barrels. The median of 11 analyst estimates projected that the Energy Information Administration will report today that inventories fell 1.5 million barrels.

“The market was surprised by the build in gasoline stocks reported by the API and will await confirmation this morning from the EIA,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for May delivery fell 3.27 cents, or 1.1 percent, to $2.9097 a gallon at 9:42 a.m. on the New York Mercantile Exchange. Trading volume was 34 percent above the 100-day average.

The API reported inventories in the U.S. East Coast, or PADD 1 region, which includes New York Harbor, the delivery point for Nymex futures, increased 2.16 million barrels.

The motor fuel was the worst performer today on the Standard & Poor’s GSCI index of 24 commodities.

Gasoline’s discount to ULSD widened 3.05 cents to 4.94 cents a gallon, after narrowing the prior four days.

Crack Spreads

The May crack spread versus West Texas Intermediate crude on Nymex fell $1.10 to $28.28 a barrel. The spread against Brent oil on ICE Futures Europe Exchange slipped 97 cents to $16.38.

Gasoline at the pump, averaged nationwide, fell 1.1 cents to $3.572 a gallon, AAA said today on its website. Prices have fallen 21.4 cents from the year-to-date high of $3.786 on Feb. 26 and are 35 cents below a year earlier.

The EIA is scheduled to report last week’s inventories at 10:30 a.m. in Washington. The report will probably say that distillate supplies fell 1.5 million barrels, according to the survey. The API reported a decline of 1.26 million barrels.

Ultra-low-sulfur diesel for May delivery fell 0.22 cent to $2.9591 a gallon on volume that was 27 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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