Gasoline Rises Amid Economic Gains as Fed Maintain Stimulus

Gasoline rose along with crude as gains for the U.S. economy and Chinese manufacturing, signaling stronger fuel demand.

Futures advanced as much as 1.7 percent and West Texas Intermediate crude climbed to the highest level in a week. U.S. jobless claims fell last week to a five-year low, the Labor Department said. China’s Purchasing Manager’s Index increased to 50.2, above the level of expansion. The Federal Reserve said yesterday it would maintain its $85 billion monthly bond buying.

“Gasoline and diesel are being dragged up by the crude market, supported by the economic news and a better-than-expected jobs report,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for September delivery rose 3.58 cents, or 1.2 percent, to $3.0321 a gallon at 9:50 a.m. on the New York Mercantile Exchange. Trading volume was 2.7 percent above the 100-day average.

Applications (INJCJC) for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week. The median forecast of 50 economists surveyed by Bloomberg called for 345,000.

Gasoline’s crack spread versus WTI fell 85 cents to $19.97 a barrel as September WTI jumped 2.3 percent to $107.42. The fuel’s premium to Brent rose 31 cents to $18.46.

Pump prices, averaged nationwide, rose 0.3 cent to $3.63 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 10.9 cents higher than a year ago.

Ultra-low-sulfur diesel for September delivery gained 2.8 cents, or 0.9 percent, to $3.083 a gallon on trading volume that was 5.1 percent above the 100-day average.

ULSD’s crack spread versus West Texas Intermediate crude narrowed $1.11 to $22.17 a barrel. The premium over Brent declined 1 cent to $20.60.

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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