Gasoline slipped from a 10-month high after a government report showed that demand for the fuel sank from a year earlier and a stronger dollar reduced the investment appeal of commodities.
Futures fell after the Energy Department said that gasoline demand over the four weeks ended March 9 was 8.42 million barrels a day, 7.2 percent below a year earlier. The dollar widened gains over the euro and the Standard & Poor’s 500 Index retreated from a four-year high.
“When the dollar remained up on the day, the market started to drift back lower and now equities are down,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Gasoline for April delivery fell 0.76 cent to settle at $3.347 a gallon on the New York Mercantile Exchange, after touching $3.3809 when the report was released at 10:30 a.m. in Washington. Futures have gained 25 percent this year, making the fuel the best performer in the Standard & Poor’s GSCI index of 24 commodities.
“Due to permanent refinery shutdowns across the Atlantic Basin, there has been upward pressure on gasoline prices in anticipation of the summer gasoline driving season,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
The S&P 500 sank 0.3 percent at 3:11 p.m. in New York, after rising as much as 0.3 percent. The dollar gained 0.5 percent against the euro after being little changed earlier.
Total fuel use over the past four weeks was 5.4 percent below a year earlier, according to department data. By that same measure, distillate demand was 7.1 percent below last year.
“Domestic demand is just terrible,” said Sander Cohan, a global transportation fuels analyst and principal with Energy Security Analysis Inc. in Wakefield, Massachusetts.
Gasoline stockpiles fell a fourth straight week, declining 1.4 million barrels to a seven-week low 228.1 million. Supplies of distillates, including heating oil and diesel, fell 4.68 million barrels last week to a 16-week low of 134.8 million.
“This time of year, especially in the first quarter, you sometimes see suppliers dipping into stock to supply export demand,” Cohan said.
Heating oil for April delivery fell 0.94 cent, or 0.3 percent, to settle at $3.2618 a gallon on the exchange.
Regular gasoline at the pump, averaged nationwide, rose 0.6 cent to $3.811 a gallon yesterday, according to AAA, the nation’s biggest motoring group. Prices have gained 16 percent this year and are 7.1 percent higher than a year ago.