Gasoline Gains on Manufacturing Gains and Brent Strength
Gasoline and diesel gained on signs that the global manufacturing outlook is improving and as Brent crude strengthened.
Futures advanced as the Institute for Supply Management’s factory index rose to 50.9 from May’s 49. Euro-area manufacturing output contracted less than estimated in June and Japanese manufacturers are optimistic for the first time in two years. Brent gained after rates were reduced at a North Sea Buzzard oil field.
“The oil market is seeing some support because Nexen is having issues with Buzzard oil production and there has been some good economic news,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
August-delivery gasoline gained 2.4 cents, or 0.9 percent, to $2.7396 a gallon at 9:58 a.m. on the New York Mercantile Exchange on trading volume that was 55 percent below the 100-day average. Prices slipped 0.4 percent last week and 1 percent in June, the third consecutive monthly decline. Gasoline retreated 11 percent in the second quarter.
Brent for August settlement rose $1.12 to $103.28 a barrel on the London ICE Futures Exchange, increasing the cost to process oil that is priced off the London benchmark. The Nexen Inc.-operated 200,000-barrel-a-day Buzzard field is said to be running at reduced rates, according to people with knowledge of the matter.
A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, London-based Markit Economics said today. The quarterly Tankan (JNTSMFG) index for large manufacturers rose to plus four in June from minus eight in March, the Bank of Japan said in Tokyo today. A positive figure means optimists outnumber pessimists.
“There was some good economic data this morning and the Buzzard oil field is supporting the Brent crude,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Pump prices, averaged nationwide, fell 0.5 cent to $3.487 a gallon, Heathrow, Florida-based AAA said today on its website. Retail costs have retreated 19 consecutive days, dropping to the lowest level since Jan. 31.
Ultra-low-sulfur diesel, or ULSD, for August delivery rose 3.24 cents, or 1.1 percent, to $2.8912 a gallon on trading volume that was 47 percent below the 100-day average. Prices rose 1.3 percent last week and 3.1 percent in June, the first gain in five months. Diesel dropped 1.2 percent in the first quarter, the third consecutive quarterly loss.
To contact the reporter on this story: Barbara Powell in Dallas at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.