Gasoline fell as Brent crude weakened versus West Texas Intermediate oil and on skepticism that Tropical Storm Isaac poses an immediate threat to Gulf Coast refining.
Futures sank for the first time this week as Brent, which influences the price of imported crude and gasoline, narrowed its premium to WTI. Isaac was forecast to strengthen into a hurricane and make landfall near the Florida-Alabama line early Aug. 29, the National Hurricane Center said.
“People are not as worried about a hurricane going into the weekend and Brent spreads have also narrowed a little,” said Joe Posillico, senior vice president of energy derivatives at Jefferies Bache LLC in New York.
September-delivery gasoline fell 3.78 cents, or 1.2 percent, to settle at $3.078 a gallon on the New York Mercantile Exchange. Prices rose 1.7 percent this week, the fourth straight weekly increase, and are up 21 percent from the year-to-date low of $2.5501 on June 21.
Brent’s premium to WTI narrowed $1.30 to $17.44 a barrel, the smallest difference since Aug. 20.
Futures also declined amid skepticism that European leaders will make progress in talks to resolve the region’s debt crisis that is curbing fuel demand. The euro fell 0.4 percent versus the U.S. currency after the European Central Bank’s plan to buy government bonds was said to be held up until Germany’s ruling on Europe’s permanent bailout fund.
“The market is still concerned looking at Europe regarding a resolution of the sovereign debt crisis,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. At the same time, “the products are being supported by the storm track of Isaac continuing to move to the west,” he said.
ECB President Mario Draghi may wait until Germany’s Constitutional Court rules on the legality of Europe’s permanent bailout fund before unveiling full details of his plan to buy government bonds, two central bank officials said.
Heating oil for September delivery fell 2.29 cents, or 0.7 percent, to $3.1101 a gallon on the exchange. Prices rose a fourth straight week, gaining 0.6 percent.
Regular gasoline at the pump, averaged nationwide, rose 1.2 cents to $3.73 gallon yesterday, the biggest one-day increase since Aug. 11, AAA data showed. Prices have climbed 40.4 cents, or 12 percent, since July 1, according to data from the nation’s largest motoring organization.