Gasoline rebounded in New York on speculation that the longest losing streak in 25 years was exaggerated.
Futures climbed as much as 0.9 percent after sinking to a four-month low yesterday. The fuel is down 22 percent this month after Exxon Mobil Corp., Valero Energy Corp. and Citgo Petroleum Corp. started refinery units following outages. Inventories rose in the week ended Oct. 19, while demand fell 5 percent, the American Petroleum Institute said late yesterday.
“Today is a good day to buy back after a long series of declines,” said Ken Hasegawa, a commodity-derivatives sales manager at Newedge Group in Tokyo. “There is no supply shortage at the moment, so the market came down sharply for nine days. Now is a good time to buy back, not only gasoline, but WTI and Brent as well.”
Refineries are starting units after repairs, indicating supplies will increase and prices may drop more as the U.S. approaches the Nov. 6 presidential election, where incumbent President Barack Obama faces Republican challenger Mitt Romney.
Obama supports increasing fuel-efficiency standards for vehicles, while Romney accuses him of impeding oil producers. The International Energy Agency, adviser to 28 advanced economies, said oil prices are too high and threaten to derail the global economic recovery.
Gasoline for November delivery advanced as much as 2.44 cents to $2.6294 a gallon in electronic trading today on the New York Mercantile Exchange and was at $2.6252 at 10:32 a.m. London time. The contract settled yesterday at $2.605, the lowest settlement since June 22. Yesterday’s decline was the ninth straight day of losses, representing the longest down streak since August 1987.
The futures contract traded in the 1980s and 1990s was phased out in 2006 and replaced with one that allowed blending with ethanol, after several states banned the use of methyl tertiary butyl ether because of groundwater contamination.
West Texas Intermediate crude for December delivery swung between gains and losses today on the Nymex and was up 13 cents at $86.80 a barrel at 10:32 a.m. London time. Front-month Brent oil prices on London’s ICE Futures Europe exchange were up 46 cents at $108.71, following six days of declines.
The average nationwide price for regular gasoline at the pump declined 2.3 cents to $3.625 a gallon yesterday, AAA, the largest U.S. motoring organization, said today on its website. That’s the lowest level since Aug. 5 and prices have fallen every day since Oct. 10. The pump price reached a 2012 high of $3.936 on April 4.
By election day, the national average will slide to about $3.40 to $3.50, Heathrow, Florida-based AAA said on Oct. 22.
U.S. gasoline stockpiles rose two weeks ago, after falling 10 of the prior 11 weeks, according to Energy Department data. The department’s next report, for the week ended Oct. 19, will probably show that supplies climbed 500,000 barrels, according to the median estimate of 11 analysts in a survey by Bloomberg News. The forecast compares with a 181,000-barrel gain reported by the API after prices settled yesterday. The government department’s data release is at 10:30 a.m. Eastern time today.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines, while the government requires that companies files reports for its weekly survey.