Gasoline Futures Decline as Inventories Jump Most in 11 Months

Gasoline futures declined as the Energy Information Administration reported that inventories of the motor fuel rose the most in 11 months.

Total gasoline supplies jumped 6.72 million barrels in the week ended Dec. 6 to 219.1 million, a two-month high, as refinery rates reached the highest since July and demand slipped. It was the biggest stockpile expansion since Jan. 4. The industry-funded American Petroleum Institute reported yesterday that stocks grew 6.27 million.

“The EIA figures confirmed what the API’s last night suggested, a huge build in gasoline stocks,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. “Higher refinery runs created ample supplies and with weather disrupting demand, gasoline balances are more than comfortable.”

Gasoline for January delivery fell 2.45 cents, or 0.9 percent, to $2.6584 a gallon at 11:50 a.m. on the New York Mercantile Exchange. Prices touched $2.642, the lowest intraday level since Nov. 20, after the EIA report was released at 10:30 a.m. in Washington. Trading volume was 24 percent above the 100-day average for the time of day.

A survey by Bloomberg projected that gasoline inventories rose 2 million barrels.

Supplies increased as refinery utilization rose 0.2 percentage point to 92.6 percent, the highest level for this time of year since 2004. Deliveries to wholesalers sank 525,000 barrels to 8.35 million barrels a day.

East Coast

Inventories in PADD 1, which includes New York Harbor, the delivery point for the Nymex contract, jumped 3.04 million barrels to 57.3 million, the highest level since Oct. 4.

“Refineries have returned from their maintenances and are operating at historically high utilization levels for this time of the year,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline’s crack spread versus West Texas Intermediate, a rough measure of refining profitability, narrowed 30 cents to $13.87. The fuel’s premium to European benchmark Brent shrank 80 cents to $2.50 a barrel.

The average U.S. pump price fell 0.2 cent to $3.257 a gallon, Heathrow, Florida-based AAA said today.

Supplies of distillates, including diesel and heating oil, increased 4.54 million barrels to 118.1 million, the highest level in six weeks. Distillate production rose 3 percent to a record 5.26 million barrels a day.

Ultra low sulfur diesel for January delivery fell 0.33 cent to $3.014 a gallon. Trading volume was 2.9 percent below the 100-day average.

ULSD’s premium over WTI widened 59 cents to $28.80 a barrel. The crack spread versus Brent rose 9 cents to $17.44.

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

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

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