Gasoline rose to a seven-week high after U.S. stockpiles of the motor fuel declined unexpectedly last week.
Futures climbed 1.4 percent as gasoline supplies fell 1.82 million barrels to 205.9 million in the seven days ended July 13, the first drop in five weeks, Energy Department data showed. The median estimate of 10 analysts surveyed by Bloomberg called for a 1.2 million-barrel increase.
“It was a pretty big decline and it was unexpected,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
August-delivery gasoline gained 3.84 cents to $2.8834 a gallon on the New York Mercantile Exchange, the highest settlement since May 29.
The largest portion of the inventory decline occurred in Padd 1, which includes New York Harbor, the delivery point for the Nymex contract. Padd 1 gasoline stockpiles fell 1.2 million barrels to an eight-month low of 52.2 million, 6.2 percent below a year earlier.
“People are worried about the drop in Padd 1, and lower inventories there can make futures prices rise,” said Hamza Khan, an analyst at the Schork Group Inc., a consulting company in Villanova, Pennsylvania.
East Coast supplies of reformulated gasoline, or RBOB, rose 643,000 barrels to 15.3 million. Inventories of the fuel are 9.2 percent below a year earlier, wider than the 8.8 percent difference the prior week.
Gasoline demand slipped to 8.63 million barrels a day, the lowest level since April 20. Consumption over the past four weeks was 3.3 percent below a year earlier.
“People are ignoring the demand figure and looking at the supply constriction,” said Sander Cohan, a global transportation fuels analyst and principal with Energy Security Analysis Inc. in Wakefield, Massachusetts.
Futures rose before the inventory report as equities strengthened and housing starts increased 6.9 percent in June to the highest level in almost four years, Commerce Department data showed today. The Standard & Poor’s 500 Index gained 0.4 percent at 2:48 p.m. in New York.
“We did get a bigger draw than people were expecting, equities were higher and housing starts were better than expected,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Heating oil and diesel supplies rose 2.62 million barrels to 123.5 million in the week ended July 13. Analysts in the survey forecast a 1.3 million-barrel gain. Inventories are 17 percent below a year earlier, according to department data.
Distillate demand increased 3.8 percent to 3.37 million barrels a day. Consumption over the past four weeks was 1.9 percent higher than a year earlier.
Heating oil for August delivery advanced 3.54 cents, or 1.3 percent, to $2.8776 a gallon, a nine-week high.
Regular gasoline at the pump, averaged nationwide, increased 2 cents to $3.426 a gallon, according to AAA. Prices have risen every day but two since July 1, gaining 10 cents. Gasoline reached a year-to-date high of $3.936 on April 4.