Gasoline Slips on Speculation Plant Startups Will Boost Supply
Gasoline fell on speculation that refinery shutdowns that boosted prices last week will soon be resolved and production will increase.
Futures sank as much as 1.4 percent. August gasoline’s premium to September narrowed, indicating less concern that the outages would drain supplies. Futures rose three consecutive weeks on speculation that upsets at plants along North America’s East Coast might crimp New York Harbor supply. Crack spreads narrowed.
“Gasoline is down on expectation that several of the refinery issues in the Northeast will be resolved this week,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
August-delivery gasoline fell 3.87 cents, or 1.2 percent, to $3.0847 a gallon at 10:21 a.m. on the New York Mercantile Exchange on trading volume that was 19 percent below the 100-day average. Gasoline has gained 12 percent in July, the best performer in the Standard & Poor’s GSCI index of 24 commodities.
August gasoline’s premium to September narrowed 1.96 cents to 4.57 cents a gallon. Gasoline sank 3.95 cents versus August ultra-low-sulfur diesel to 0.55-cent discount.
Speculative bullish gasoline wagers jumped by 19,244 futures and options combined, or 59 percent, to 51,737 contracts in the seven days ended July 16, according to the Commodity Futures Trading Commission’s July 19 Commitments of Traders report.
“Some of those refinery issues are going to get resolved,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “We had an awful lot of length piled into the market. Some of it could be unwinding and some of the gas-to-heat spread length is getting unwound.”
Pump prices, averaged nationwide, were unchanged at $3.671 a gallon, Heathrow, Florida-based AAA said today on its website.
Ultra-low-sulfur diesel for August delivery rose 0.08 cent to $3.0902 a gallon on volume that was 8.7 percent below the 100-day average.
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