Oil and heating oil climbed to two-year highs and gasoline gained as U.S. home sales and retail purchases topped estimates, adding to confidence that the economy will grow and increase fuel demand. Ethanol declined.
Oil “is being moved around by macro issues more than by supply and demand,” said Adam Sieminski, chief energy economist at Deutsche Bank in Washington.
Crude oil for January delivery jumped $1.25, or 1.4 percent, to settle at $88 a barrel on the New York Mercantile Exchange, the highest price since Oct. 8, 2008. It was the first time in three weeks that oil gained two days in a row.
Oil gained after the National Association of Realtors reported that pending sales of U.S. existing houses jumped by a record 10 percent in October and Retail Metrics Inc. said retail sales rose 5.3 percent.
Oil also advanced as the euro strengthened against the dollar after European Central Bank President Jean-Claude Trichet said the ECB will keep offering banks as much cash as they want through the first quarter.
Heating oil for January delivery gained 4.9 cents, or 2 percent, to $2.4546 a gallon, the highest price since Oct. 8, 2008. Heating oil is traded as a proxy for diesel.
Stockpiles of distillates have fallen 10 consecutive weeks, according to the U.S. Energy Department, and dropped 194,000 barrels last week to 158.1 million. Inventories are at the second-highest level for this time of year in the past 10 years.
The January heating oil crack spread increased 81 cents to $15.09 a barrel. The one-year average is $10.31.
Gasoline for January delivery gained 5.49 cents, or 2.4 percent, to $2.3553 a gallon on the Nymex, the highest settlement price since May 3, after stockpiles in the U.S. Northeast fell.
Inventories along the East Coast declined 1.8 percent last week, the Energy Department report showed. Irving Oil Corp. said that it shut a unit at its Saint John refinery in New Brunswick, which supplies New York Harbor, the delivery point for the Nymex contract.
The January gasoline crack spread gained $1.06 to $10.92 a barrel. The one-year average is $9.33.
Denatured ethanol for December delivery declined for the third day in four, falling 4.9 cents, or 2.3 percent, to $2.075 a gallon. Futures have dropped 13 percent in the past month.
In cash market trading, ethanol fell 5 cents in New York to $2.19 a gallon, 6 cents in Chicago to $2.08, 4 cents on the Gulf Coast to $2.225, and 5.5 cents on the West Coast to $2.19.
Refineries and Transport
Chevron Corp. shut down a crude oil pipeline after a leak was detected near a creek in Salt Lake City, according to Lisa Harrison Smith, a spokeswoman for the mayor’s office.
Valero Energy Corp. restarted a fluid catalytic cracker late yesterday at its Benicia, California, refinery, Bill Day, a company spokesman, said in an e-mail. The cracker had tripped offline.
Exxon Mobil Corp. isolated a failure yesterday in one of the fuel gas treating units at its Baton Rouge, Louisiana, refinery, George Pietrogallo, a company spokesman, said in an e-mail. Crews are restoring operations to normal rates and customer expectations will be met, he said.