Gasoline Slides as U.S. Refineries Restart, Dollar Strengthens

Gasoline futures slipped as refineries started units and a stronger dollar reduced the appeal of commodities as an investment. Crack spreads narrowed.

Futures fell 1.1 percent as Motiva Enterprises LLC’s Port Arthur, Texas, refinery is starting units after an April 14 area power loss. The dollar rose 0.4 percent against the euro at 9:54 a.m. in New York. The fuel’s crack spread versus May West Texas Intermediate narrowed 34 cents to $27.54 a barrel, and the June spread versus Brent sank 25 cents to $16.35.

“The idea that the Port Arthur refineries are coming back suggests it was a very temporary blip,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “It looks like yesterday’s firmness was a bit of short- covering.”

Gasoline for May delivery fell 2.99 cents to $2.7519 a gallon at 9:52 a.m. on the New York Mercantile Exchange, on trading volume that was 9.7 percent above the 100-day average.

The power loss in Port Arthur affected three refineries, including two owned by Total Petrochemicals USA Inc. and Valero Energy Corp., that have a combined oil processing capacity of 1.08 million barrels a day. Total has declined to comment on its plant’s status, while Valero said yesterday all units are operating.

The Energy Information Administration is scheduled to report last week’s inventories at 10:30 a.m. today in Washington. The statistical arm of the Department of Energy will probably report that gasoline supplies fell 800,000 barrels last week and distillate stockpiles declined 350,000 barrels, according to the median estimate of 11 analysts in a survey by Bloomberg.

The industry-funded American Petroleum Institute reported yesterday that gasoline inventories rose 253,000 barrels and distillate supplies increased 1.26 million barrels.

Ultra-low-sulfur diesel for May delivery declined 3.34 cents, or 1.2 percent, to $2.7731 a gallon on volume that was 11 percent above the 100-day average. Prices touched $2.7683, the lowest intraday level since July 13.

Gasoline at the pump, averaged nationwide, fell 0.3 cent to $3.519 a gallon, AAA said today on its website. Prices have fallen 26.7 cents from the year-to-date high of $3.786 on Feb. 26 and are 38.5 cents below a year ago.

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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