Gasoline fell on concern that economic growth may slow as European leaders disagreed on how Greece would repay its debt and a budget showdown loomed in Washington between President Barack Obama and House Republicans.
Futures slid as euro-area finance ministers put off until Nov. 20 a decision on financing Greek debt. Obama will meet tomorrow with corporate executives on his plan to impose higher taxes on the wealthy to cut the deficit and avoid the so-called fiscal cliff and risking another recession. MasterCard Inc. said demand fell last week to an eight-month low.
“A lot of people are nervous and avoiding risk,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “There’s uncertainty over Greece. And no doubt, the prospect of the fiscal cliff is making us nervous as well.”
Gasoline for December delivery fell 2.25 cents, or 0.8 percent, to $2.6538 a gallon on the New York Mercantile Exchange, the second consecutive decline.
Obama, re-elected on Nov. 6, is seeking support from executives such as General Electric Co. Chief Executive Officer Jeffrey Immelt to pressure a divided Congress to strike a deal before January to forestall $607 billion in automatic tax hikes and spending cuts. The Democrats widened their hold on the Senate in the election. Republicans, who oppose tax increases to raise revenue, maintained control of the House.
“There’s the uncertainty of the election last week and the uncertainty about the fiscal cliff this week and next week,” said Ray Carbone, president of Paramount Options Inc. in New York.
U.S. gasoline inventories probably fell 500,000 barrels last week, according to the median estimate of nine analysts in a Bloomberg survey. The Energy Department will report last week’s inventories on Nov. 15, a day later than usual because of the Veterans Day federal holiday yesterday.
U.S. gasoline demand fell 0.8 percent last week to the lowest level since March as Sandy disrupted travel and supplies on the East Coast for a second straight week, according to data from MasterCard’s SpendingPulse report. The decline follows a drop of 2.4 percent in the seven days ended Nov. 2.
U.S. travel during the Thanksgiving holiday weekend will climb for a fourth straight year, gaining 0.7 percent from 2011, as trips by automobile rise even as airplane travel declines, AAA said today. The increase would be the smallest since 2009, AAA said.
Robert Darbelnet, chief executive officer at AAA, said in a statement that it’s unclear the impact Hurricane Sandy will have on travel plans for mid-Atlantic region residents. Sandy made landfall in New Jersey on Oct. 29, disrupting travel, power and shutting refineries, gas stations and pipelines carrying gasoline from the Gulf Coast.
“Demand is going to continue to be under pressure,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “And there’s plenty of inventories building on the Gulf that has been unable to move because of pipeline issues.”
In New Jersey, two refineries operated by Phillips 66 and Hess Corp. haven’t reopened since the storm. Hess said today that truck loadings remain suspended at its Bayonne terminal.
AAA estimates that 70 percent to 75 percent of gasoline stations in New York City are open and 80 percent to 85 percent are open in New Jersey.
“The problem we were facing doesn’t relate to gas supply or electricity,” Darbelnet said in a press conference today. “It’s a matter of distribution and the additional time it takes to get gas from distribution centers to the service stations.”
The average nationwide cost for regular gasoline rose 0.3 cent to $3.44 a gallon, AAA said today on its website. Since Oct. 7, prices are down 37.8 cents. The pump price reached a 2012 high of $3.936 on April 4.
December-delivery heating oil declined 3.84 cents, or 1.3 percent, to $2.9608 a gallon on the exchange. Supplies of distillates, including diesel and heating oil, probably fell 900,000 barrels last week, according to the survey.