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Gasoline Futures Decline as Brent Retreats, Consumer Prices Rise

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Feb. 17 (Bloomberg) -- Gasoline fell for the first time in three days as Brent crude slipped and a rise in U.S. consumer prices boosted concern that demand for the fuel may decline.

Futures retreated as Brent sank 0.4 percent in London, lowering the cost to produce fuel in Europe, a key source of U.S. imports. Prices also dropped as the consumer-price index increased 0.2 percent, the Labor Department reported today in Washington.

“It’s following Brent to a great degree,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone.

March-delivery gasoline fell 3.15 cents, or 1 percent, to settle at $3.0156 a gallon on the New York Mercantile Exchange. Prices gained 1.4 percent this week, and are up 12 percent so far this year.

Brent crude for April settlement dropped 53 cents to $119.58 a barrel on the ICE Futures Europe exchange.

Consumer prices rose after no change the prior month. Economists surveyed by Bloomberg forecast a 0.3 percent gain. During the past 12 months, prices climbed 2.9 percent, the smallest year-over-year advance since March 2011.

U.S. gasoline demand last week was the lowest level for this time of year in weekly data since 2003, Energy Department data show. Consumption over the past four weeks was 6.4 percent below a year earlier.

Demand Down

“Demand-wise we’re down and supply doesn’t appear to be under any kind of jeopardy of being tight,” Kilduff said.

Regular gasoline at the pump, averaged nationwide, rose 0.6 cent to $3.529 yesterday, according to AAA data. Prices were 12 percent higher than a year earlier.

The index of U.S. leading indicators increased in January for a fourth month, signaling the world’s largest economy will keep expanding through the first half of 2012. The Conference Board’s gauge of the next three to six months climbed 0.4 percent last month.

“High gasoline prices are going to put a crimp in growth at some point, but it’s not going to stop growth,” Carl Larry, president of the New York City-based Oil Outlooks & Opinions LLC, said by phone. “We are going to get used to this, we are going to change our driving patterns. It’s not going to slow the path of recovery.”

Heating oil for March delivery fell 2.08 cents, or 0.7 percent, to settle at $3.1889 a gallon on the exchange.

To contact the reporter on this story: Ksenia Galouchko in New York at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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