Gasoline jumped to a two-week high after the Energy Department reported that U.S. stockpiles of the motor fuel fell unexpectedly last week and imports slid to the lowest level in 15 weeks.
Futures rose 4.2 percent as stockpiles dropped 1.43 million barrels to 213.2 million, the biggest loss in nine weeks. The median forecast of 12 analysts surveyed by Bloomberg News was for a gain of 775,000 barrels. Daily gasoline imports dropped 21 percent to an average 683,000 barrels, the fewest since the week ended March 11.
“The market is focused on the headline inventory number,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The market doesn’t care about why it fell. The market doesn’t care about demand.”
Gasoline for July delivery rose 12.01 cents to settle at $3.0097 a gallon on the New York Mercantile Exchange, the largest gain since May 9. The more actively traded August contract gained 11.93 cents to $2.9349. July gasoline and heating oil futures expire at the end of floor trading tomorrow.
Futures were up a third day before the report as Greek Prime Minister George Papandreou won approval for the first part of an austerity plan that may ward off default and quell fears of a broader European debt crisis. The Greek Parliament passed Papandreou’s 78 billion-euro package of budget cuts and asset sales, crucial to receiving further international financial aid.
‘Sigh of Relief’
“Passage of the austerity budget will make some breathe a sigh of relief that the debt crisis would not spread throughout the euro zone and result in a slower economy throughout the region,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline stockpiles in U.S. East Coast, or Padd 1 region, fell 1.7 percent to 55.3 million barrels, 8.1 percent below a year earlier. Supplies of reformulated gasoline, or RBOB, in the region were 27 percent lower than in 2010, department data showed. The Nymex futures contract reflects RBOB delivered to New York Harbor.
The inventory decline came as imports and production dropped. Plants reduced refinery rates 1.1 percentage points to 88.1 percent, cutting output of the motor fuel by 4.7 percent to the lowest level in seven weeks. Imports were 34 percent below a year earlier.
“Brent strength is making it uneconomic to import gasoline and domestic production overall is basically flat,” said Sander Cohan, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. “The report is bullish because you’ve lost the import stream and domestic production hasn’t moved into the gap yet.”
Gasoline and heating oil premiums over crude oil on Nymex increased as Brent crude on the ICE Futures Europe exchange gained more than West Texas Intermediate oil. Refineries on the East Coast, where Nymex gasoline futures are delivered, primarily use oil from Europe and West Africa, which are priced versus Brent.
The August gasoline crack spread increased $3.13 to $28.50 a barrel on the exchange, while the August heating oil crack spread gained $2.04 to $28.49.
The WTI-Brent spread, based on August futures, was $17.63 a barrel, up from $15.89 yesterday.
Gasoline demand, measured by deliveries to wholesalers, fell to a three-week low of 9.26 million barrels a day. On a four-week average, consumption was 0.3 percent below a year earlier.
“Demand is dropping but gasoline is the item people are going to want to own and buy,” said Gordon Elliott, a risk management specialist at INTL FC Stone LLC in St. Louis Park, Minnesota.
Supplies of heating oil and diesel increased 258,000 barrels to 142.3 million, a six-week high. The survey projected a rise of 1.05 million barrels. Demand for industrial, trucking and home-heating fuels climbed 3.9 percent to 3.55 million barrels a day, the first gain in five weeks.
Regular gasoline at the pump fell 0.8 cent to $3.543 a gallon yesterday, according to AAA data. That’s the lowest level since March 18.
Heating oil for July delivery rose 9.45 cents, or 3.3 percent, to settle at $2.9202 a gallon. The August contract gained 9.32 cents to $2.9347.