Gasoline rose a fifth consecutive day on speculation that refinery outages in the Midwest will reduce supply and that demand for the motor fuel will rise during the three-day Memorial Day holiday weekend.
Futures advanced 1.1 percent on reports of upsets at Illinois refineries owned by Marathon Oil Corp. and Exxon Mobil Corp. Prices at the pump have fallen 4.3 percent since May 6, AAA data show.
“The uncertainty about these refinery glitches have given us some support and, when you get ahead of the holiday, people are going to speculate we’re going to get some good demand,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Gasoline for June delivery increased 3.21 cents to settle at $3.0483 a gallon on the New York Mercantile Exchange. It was the highest settlement since May 13. The premium of gasoline over crude oil, or the crack spread, based on July contracts, rose $1.97 to $26.09 a barrel, the highest level since May 16.
This weekend’s three-day Memorial Day holiday period is the traditional kickoff of the summer driving season.
On a four-week average, gasoline demand in the week ended May 20 was 2.1 percent below a year earlier, according to Energy Department data. Supplies increased 3.79 million barrels to 209.7 million, a seven-week high.
Inventories in the Midwest, or Padd 2 region, gained 543,000 barrels last week to 48.6 million.
Regular retail gasoline dropped 0.1 cent to $3.813 a gallon, AAA said on its website.
Heating oil for June delivery rose 0.26 cent to settle at $2.9829 a gallon on the exchange, the highest settlement since May 10.