Gasoline Gains on Speculation Storm May Threaten Oil Production
Gasoline advanced on speculation that Tropical Storm Dorian will strengthen and eventually threaten oil production, refining or distribution on the U.S. Gulf and East coasts.
Dorian, with maximum sustained winds of 50 miles (80 kilometers) per hour, was about 1,425 miles east of the northern Leeward Islands and moving west-northwest at 20 mph as of 5 a.m. New York time, according to the National Hurricane Center. The Gulf is home to 45 percent of U.S. refining capacity, while the New York Harbor market is the delivery point for the New York Mercantile Exchange contract.
“Right now, Dorian is headed toward Florida,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “It could go into the Caribbean. It could go up the East Coast. Traders, if they’re looking at the National Hurricane Center map, their bias is to be long gasoline.”
August-delivery gasoline rose 2.6 cents, or 0.9 percent, to $3.043 a gallon on the Nymex as of 9:56 a.m. on volume that was 28 percent below the 100-day average. Gasoline has dropped 2.6 percent this week, headed for its first weekly loss in a month.
Pump prices, averaged nationwide, fell a fourth consecutive day, dropping 0.7 cent to $3.648 a gallon, Heathrow, Florida-based AAA said today on its website. That’s the lowest level since July 15. Prices are 15.8 cents higher than a year earlier.
Ultra-low-sulfur diesel headed for the first loss in five weeks as crude oil retreated after China reduced excess factory capacity, signaling slowing growth in the world’s second-biggest energy consumer.
Futures fell as China ordered companies in 19 industries to reduce unused production capacity. China’s manufacturing weakened more than estimated in July, according to a preliminary survey of purchasing managers. The U.S. exported 1.03 million barrels a day of distillates last week, according to a preliminary estimate from the Energy Information Administration.’
Ultra-low-sulfur diesel for August delivery fell 1.36 cents, or 0.5 percent, to $3.0214 a gallon at 10:01 a.m. on the Nymex on trading volume that was 21 percent below the 100-day average. ULSD has declined 2.2 percent this week.
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