Gasoline Slides After Report That Stockpiles Rose Last Week

Gasoline slid to the lowest level in four weeks after an industry group said that inventories of products and oil rose last week. Crack spreads narrowed.

Futures fell following the American Petroleum Institute report that gasoline supplies gained 1.94 million barrels last week, distillates increased 3.11 million barrels and oil stockpiles added 4.4 million. Gasoline’s crack spread versus WTI narrowed 27 cents to $24.12 a barrel. July gasoline’s premium over July Brent fell 34 cents to $14.75 at 9:20 a.m.

“The API report pushed the market down,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “It was a surprisingly bearish report, just reaffirmation that weak fundamentals are weighing on the market.”

Gasoline for June delivery declined 3.34 cents, or 1.2 percent, to $2.7696 a gallon at 9:18 a.m. on the New York Mercantile Exchange. Prices touched $2.7577, the lowest intraday level since May 2. Trading volume was 22 percent above the 100-day average for the time of day.

The Energy Information Administration, the statistical arm of the Energy Department, is scheduled to report last week’s inventories at 11 a.m. today in Washington, a day later than usual because of the May 27 U.S. Memorial Day holiday. The report will probably say that gasoline supplies declined 500,000 barrels, distillates fell 450,000 barrels and oil stocks dropped 500,000 barrels, according to the median estimate of 11 analysts in a survey by Bloomberg.

Awaiting EIA

“The market opened lower on the back of bearish API stats and will look toward the EIA for confirmation of builds across the board,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline at the pump, averaged nationwide, fell 0.2 cent to $3.619 a gallon, Heathrow, Florida-based AAA, the nation’s largest motoring organization said today on its website. Prices have declined for eight consecutive days and are 0.7 cent below a year earlier.

ULSD for June delivery dropped 3.38 cents, or 1.2 percent, to $2.8357 a gallon on trading volume that was 2 percent below the 100-day average.

July ULSD’s crack spread versus WTI crude oil narrowed 37 cents to $26.82 a barrel. July ULSD’s premium over Brent fell 35 cents to $17.54 a barrel.

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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