Gasoline Slips as Imports Seen Rising From 11-Month High

Gasoline fell for a second day in New York on speculation imports of the motor fuel will climb from an 11-month high and production from U.S. refineries increases.

Foreign shipments of motor fuel to the U.S. East Coast rose to 861,000 barrels a day in the week ended May 9, the most since June 21 and the highest seasonal level since 2007, according to government data. Imports may rise by an additional 50,000 barrels a day this week, according to Energy Analytics Group Ltd., a fund adviser.

“We saw a big jump in imports over the last week and we should see a larger-than-normal figure over the next week as well,” Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois, said in a phone interview today. “The prices in the U.S. have been high enough to continue attracting shipments from elsewhere.”

June-delivery gasoline slid 0.91 cent, or 0.3 percent, to $2.9555 a gallon on the New York Mercantile Exchange at 9:35 a.m. The premium of June over July narrowed 0.14 cent to 1.41 cents, the smallest differential for the two contracts nearest expiration since March.

Gasoline’s crack spread versus West Texas Intermediate crude narrowed 22 cents to $21.68 a barrel, while the premium to European benchmark Brent retreated 23 cents to $14.26.

‘Sizable’ Positions

U.S. production of the motor fuel at 9.61 million barrels a day was the highest since December, according to U.S. Energy Information Administration data.

Net-long positions in RBOB gasoline contracts, or bets that prices would rise, totaled 60,723 futures and options combined in the week ended May 13, about 19 percent higher than the five-year average for the time of year, according to the U.S. Commodity Futures Trading Commission.

“We’ve got very strong gasoline production and the speculative length in gasoline is quite sizable,” Ritterbusch said. “That’s also a factor.”

The average U.S. pump price slipped 0.4 cent to $3.642 a gallon, according to data from Heathrow, Florida-based AAA. Prices are 1.2 cents below a year ago.

Ultra low sulfur diesel for June delivery fell 0.53 cent to $2.9356 a gallon. The fuel’s crack spread versus WTI crude narrowed 7 cents to $20.84 a barrel while the motor fuel’s premium to Brent slipped 8 cents to $13.90.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net David Marino, Charlotte Porter

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