Gasoline Futures Slide After Report Supplies Increased Last Week

Gasoline fell after an industry-funded report that supplies of the motor fuel increased last week.

Futures pared the biggest monthly gain since March 2012 after the American Petroleum Institute said stockpiles rose 1.8 million barrels in the week ended July 26. Prices rebounded briefly on reports that the U.S. economy grew more than forecast in the second quarter and more private-sector jobs were added in July.

“Gasoline been weighed down by the surprise build in the API report but we’re seeing support from the GDP figures and job growth numbers,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for August delivery fell 3.2 cents, or 1.1 percent, to $2.9865 a gallon at 9:54 a.m. on the New York Mercantile Exchange. Trading volume was 13 percent below the 100-day average. Futures have gained 8.5 percent this month, the best performer in the Standard & Poor’s GSCI commodity index.

The more actively traded September contract fell 3.28 cents to $2.9422 a gallon.

The Energy Information Administration is scheduled to report last week’s stockpiles at 10:30 a.m. today in Washington. The EIA will probably say that gasoline inventories fell 1.5 million barrels and that distillate supplies, including diesel and heating oil, increased 450,000 barrels, according to the median estimate of 12 analysts in a survey by Bloomberg.

GDP Increases

Gross domestic product, the value of all goods and services produced, rose at a 1.7 percent annualized rate in the second quarter, after a 1.1 percent gain the prior quarter, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for a 1 percent advance. Consumer spending, the biggest part of the economy, climbed 1.8 percent after increasing 2.3 percent in the previous period.

U.S. companies added 200,000 jobs in July, figures from the Roseland, New Jersey-based ADP Research Institute showed. The median forecast of 40 economists surveyed by Bloomberg called for a 180,000 gain.

The Federal Reserve may signal its intentions today on maintaining the scale of its $85 billion in bond purchases.

“The next move in the market is awaiting the Fed comments,” Lipow said.

Fed Stimulus

The central bank ends a two-day meeting today. Fed Chairman Ben S. Bernanke has said that the bank may start paring stimulus aimed at furthering growth as the U.S. economy improves.

“If you’re worried about tapering you should be more worried after this morning’s strong data because the stronger the economy, the better chance the Fed will start cutting back on bond purchases sooner than later,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Gasoline’s crack spread versus WTI fell $1.70 to $20.17 a barrel. The fuel’s premium to Brent narrowed 59 cents to $17.45.

Pump prices, averaged nationwide, rose 0.3 cent to $3.627 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 12.7 cents higher than a year ago.

Ultra-low-sulfur diesel for August delivery declined 1.17 cents, or 0.4 percent, to $2.995 a gallon on trading volume that was 10 percent below the 100-day average. Prices have risen 4 percent in July. The September contract slipped 1.54 cents to $2.9936.

ULSD’s crack spread versus West Texas Intermediate crude narrowed 79 cents to $22.51 a barrel. The premium over Brent increased 34 cents to $19.81.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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