Heating Oil Gains as Germany Backs ECB Plan, Equities Advance

Aug. 6 (Bloomberg) -- Heating oil advanced to a two-week high as the German government backed the European Central Bank’s plan to purchase bonds and U.S. equities advanced on better-than-forecast earnings.

Futures rose a second straight day as the Standard & Poor’s 500 Index touched a three-month high in New York. German Chancellor Angela Merkel’s government backed the ECB’s bond-buying plan announced last week to contain the region’s debt crisis, which threatens economic growth and fuel demand.

“There’s some optimism the economy will get better and demand will improve,” said Fred Rigolini, vice president of Paramount Options Inc. in New York.

Heating oil for September delivery rose 1.48 cents, or 0.5 percent, to $2.9409 a gallon on the New York Mercantile Exchange, the highest settlement since July 19.

Prices also gained as the dollar index, which tracks the currency against those of six major U.S. trading partners, fell 0.2 percent. A weaker dollar makes commodities more expensive for buyers outside the U.S., potentially increasing demand.

“The dollar is coming off a little bit and the equities are higher,” Rigolini said.

Gasoline, up 1.5 percent last week as inventories fell amid outages such as the Aug. 2 fire on a diesel hydrotreater at HollyFrontier Corp.’s Tulsa refinery, slipped today on speculation that more cargoes will arrive soon from Europe.

Gasoline for September delivery fell 0.88 cent, or 0.3 percent, to settle at $2.9222 a gallon on the Nymex, the first decline in three days.

Pullback

“At the end of last week, prices were running away from the complex with the fire at the Holly refinery and the draw in gasoline,” said Hamza Khan, an analyst at the Schork Group Inc., a consulting company in Villanova, Pennsylvania. “This is just a pullback and a correction.”

A fluid catalytic cracker has been started up at Sunoco Inc.’s Philadelphia refinery, which serves New York Harbor, the delivery point for the Nymex gasoline contract.

The September contract’s premium to October gasoline narrowed 1.34 cents to 20.49 cents.

“September/October went nuts last week,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Sunoco is up and cargoes are coming as well.”

Regular gasoline at the pump, averaged nationwide, rose 0.9 cent to $3.619 a gallon yesterday, AAA data showed. That’s the highest price since May 30. Prices have fallen 8.1 percent from a 2012 high of $3.936 on April 4, according to AAA, the nation’s largest motoring organization.

To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net

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