Gasoline Heads for First Weekly Gain in a Month as Crude Rises

Gasoline headed for the first weekly gain in a month as Middle East supply disruptions and violence in Egypt boosted crude and on concern a tropical storm may develop in the Gulf of Mexico.

Futures gained as much as 0.6 percent. Thousands of Egyptians protested the killing of supporters of ousted President Mohamed Mursi in a crackdown that sparked nationwide clashes and the imposition of emergency rule. A low-pressure area in the southwestern Gulf has a 50 percent chance of becoming tropical in the next two days, according to the U.S. National Hurricane Center in Miami.

“The market is going to see some underlying support from the unrest we are seeing throughout the Middle East and the potential for a tropical storm in the Gulf that could result in a minor supply disruption out of Mexico,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for September delivery gained 0.52 cent to $2.9897 a gallon at 10:22 a.m. on the New York Mercantile Exchange on trading volume that was 32 percent below the 100-day average. Prices are up 2.8 percent this week.

U.S. President Barack Obama condemned the violence against Egyptian civilians yesterday, canceled a scheduled joint military exercise with Egypt and directed his staff to assess whether further steps are warranted.

The motor fuel’s crack spread versus West Texas Intermediate crude narrowed 27 cents to $17.75 a barrel. October gasoline’s premium over Brent slid 21 cents to $10.08 a barrel.

Pump prices, averaged nationwide, rose 0.2 cent to $3.541 a gallon, Heathrow, Florida-based AAA said today on its website. It was the first increase this month.

Ultra-low-sulfur diesel for September delivery rose 1.17 cents, or 0.4 percent, to $3.0845 a gallon on the New York Mercantile Exchange, heading for a weekly gain of 3 percent. Trading volume was 47 percent below the 100-day average.

ULSD’s crack spread versus West Texas Intermediate crude narrowed 8 cents to $21.65 a barrel. The October contract’s premium over Brent slipped 11 cents to $19.63 a barrel.

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

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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