Gasoline slid to a three-month low after Greece failed to form a coalition government, setting the stage for new elections and increasing concern that Europe’s economy may slow, reducing fuel demand.
Futures sank as the dollar gained against the euro, reducing the investment appeal of commodities. Greek Pasok party leader Evangelos Venizelos said new elections will be held in Europe’s most debt-laden country after attempts to form a government failed.
“There’s nothing positive out of Europe and any rally will be short-lived,” said Fred Rigolini, vice president of Paramount Options Inc. in New York.
Gasoline for June delivery fell 1.49 cents, or 0.5 percent, to settle at $2.9441 a gallon on the New York Mercantile Exchange. It was the fourth consecutive decline.
Gasoline has lost 14 percent since reaching a 2012 high of $3.4166 on March 26. In that same period, futures pared their year-to-date gain to 9.6 percent from 27 percent.
The dollar rose 0.7 percent against the euro at 3:05 p.m. in New York. The euro touched $1.2722, the lowest level since Jan. 17.
The euro faltered as Greek President Karolos Papoulias tries to persuade divided party leaders to accept his proposal for a government of prominent non-politicians to steer the country and avert new elections. Political gridlock has left the country, the most indebted in the 17-nation euro zone, without a government for more than a week.
Greece must elect a government that sticks to the terms of its international bailout in order to stay in the euro, German Finance Minister Wolfgang Schaeuble said.
Gross domestic product in the euro region stagnated in the latest quarter compared with the prior three months, the European Union’s statistics office in Luxembourg said today. The German economy, the largest in the 17-nation euro region, expanded 0.5 percent.
“Germany saved the euro zone from going into recession although the problems in Europe haven’t really gone away,” said Phil Flynn, vice president of research at PFGBest in Chicago. “The dollar has been a safe haven and put downward pressure on the market.”
In U.S. economic news, the National Association of Home Builders/Wells Fargo index of builder confidence rose to 29, the highest since May 2007. The Federal Reserve Bank of New York’s general economic index increased to 17.1 this month from 6.6 in April.
“The market is trying to hold above yesterday’s low as we get a little bit of positive economic news,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “But uncertainty over Greece will make it a headline-driven market.”
Regular gasoline at the pump, averaged nationwide, was unchanged at $3.727 a gallon yesterday, according to AAA. Prices are down 20.9 cents since reaching a 2012 high of $3.936 on April 4.
June-delivery heating oil rose 0.35 cent to settle at $2.933 a gallon on the exchange, the first gain in four days.