Jan. 25 (Bloomberg) -- Gasoline futures slipped to a five-week low on speculation that supplies rose last week and as a report that U.S. home prices declined indicated the economy and fuel demand may struggle to improve in 2011.
Futures sank as much as 2.2 percent as the S&P/Case-Shiller index of home values in 20 cities lost 1.6 percent in November from the prior year, the biggest annual loss since December 2009. Gasoline stockpiles probably rose 2.5 million barrels last week, according to the median estimate of 14 analysts in a survey by Bloomberg News.
“There no doubt the market has been well supplied and that it takes the housing numbers as a negative, especially if we see concern about the global economy start to rise,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Gasoline for February delivery fell 5.32 cents, or 2.2 percent, to $2.36 a gallon at 9:409 a.m. on the Nymex. Prices touched $2.3466, the lowest intraday price for the contract nearest to expiration since Dec. 20.
Futures also dropped as the dollar gained 0.3 percent against the euro, weakening the investment appeal of commodities, as Britain’s gross domestic product sank 0.5 percent in fourth quarter, according to a report by the Office for National Statistics.
The gasoline crack spread, based on March contracts, narrowed $1.06 to $13.46 a barrel.
Supplies of distillates, including heating oil and diesel, probably dropped 500,000 barrels last week, according to the survey. Stockpiles of crude oil increased 1.35 million barrels.
Heating oil for February delivery dropped 3.88 cents, or 1.5 percent, to $2.5805 a gallon. The heating oil crack spread, based on March contracts, fell 50 cents at $21.80 a barrel.
Regular gasoline at the pump, averaged nationwide, fell 0.2 cent to $3.11 a gallon yesterday, AAA said on its website.
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