Gasoline gained as the Energy Department reported that inventories slipped to an 11-week low and demand rose.
Futures reached a two-week high as stockpiles fell 5.32 million barrels to 219.7 million, the fifth straight drop. A survey by Bloomberg News projected a decline of 2 million barrels. Demand, as measured by deliveries to wholesalers, rose 2.8 percent to average 9.07 million barrels a day last week.
“We continue to see seasonal draws as refineries are going into maintenance and refiners are reducing winter-grade gasoline inventories,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for April delivery rose 1.68 cents, or 0.6 percent, to settle at $3.0213 a gallon on the New York Mercantile Exchange, the highest settlement since March 9.
Demand, measured on a four-week average, was 1.2 percent above the same period a year earlier.
Total fuel demand rose 1 percent from the prior week to average 19.3 million barrels a day. The four-week average demand was 0.5 percent below a year earlier.
“The bearish factor today is that nothing is really bullish,” said David Pursell, a managing director at Tudor Pickering Holt & Co. LLC in Houston. “A headline draw is welcome, but it’s a question of what’s the driver. Overall demand is sluggish. Crude inventories and Cushing inventories are building.”
Crude oil inventories rose 2.13 million barrels to 352.8 million in the week ended March 18, department data shows. Supplies at Cushing, Oklahoma, the delivery point for the U.S. benchmark crude grade, rose 0.4 percent.
Heating oil for April delivery dropped 2.12 cents, or 0.7 percent, to settle at $3.055 a gallon, after reaching a two-week high yesterday.
Heating oil slipped as stockpiles of distillates, including heating oil and diesel, rose unexpectedly and demand fell. Distillates stockpiles gained 7,000 barrels to 152.6 million, after supplies had fallen the prior five weeks and lost 7.2 percent. Distillate demand slipped 3.6 percent to an average 3.77 million barrels a day, the lowest level in three weeks.
“This is a startling and pretty bearish signal,” said Andrew Reed, a diesel analyst and a principal with Energy Security Analysis Inc. in Wakefield, Massachusetts.
Heating oil had gained on speculation that global diesel demand and prices would rise because of lower fuel exports from Japan after the March 11 earthquake and from greater demand for diesel fuel to power Japanese industries after that country’s nuclear crisis.
“There was all this anticipation,” Reed said.
Japan is Asia’s fourth-largest diesel exporter, according to Energy Security Analysis. Exxon Mobil Corp. said today it restored all four of its Japan Group refineries to full operations.
Heating oil’s premium to gasoline narrowed to 3.37 cents from 7.17 cents yesterday. The gap between the two products had widened sixfold to 15.35 cents March 16 from 2.53 cents March 10 after the earthquake and tsunami struck Japan.
Regular gasoline at the pump, averaged nationwide, rose 0.1 cent to $3.548 a gallon yesterday, AAA said on its website.