Gasoline Advances on Shut Refinery and Stronger Economic Data

Gasoline advanced as a New Jersey refinery remained shut since Hurricane Sandy’s Oct. 29 landfall and on speculation that U.S. economy is improving and fuel demand may increase.

Futures rose as Phillips 66’s 238,000-barrel-a-day Bayway plant is closed. The U.S. producer price index fell 0.2 percent in October, Labor Department figures showed. Retail sales declined in October while September sales were revised upward, according to Commerce Department figures. Prices widened gains after Israel killed a Hamas leader in an air strike.

“We had quite a bit of decent economic data coming out the last few weeks and then the market did get a pop from the geopolitical headlines,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consultant in London.

Gasoline for December delivery rose 2.52 cents, or 1 percent, to settle at $2.679 a gallon on the New York Mercantile Exchange, the first gain in three days.

Prices touched $2.7096 after the report that the death of the leader of Hamas’s militant wing, Ahmed al-Jabara, occurred as Israel carried out a series of air strikes in the Gaza Strip today. Israel said it was ready to use ground troops if needed to end attacks on its citizens.

Retail Sales

October U.S. retail sales fell 0.3 percent, the first drop in four months, Commerce Department data show. The drop followed a 1.3 percent rise in September. The department said it was able to collect data from the areas affected by Sandy, even as it couldn’t quantify its impact.

Excluding volatile food and energy, the so-called core measure decreased 0.2 percent, the first drop since November 2010, Labor Department data show.

Hess Corp. said today it’s restarting the 70,000-barrel-a-day Port Reading, New Jersey, refinery and expects it to be producing fuel by the end of the week. As much as 94 percent of East Coast capacity was affected by Sandy, which also forced the shutdown of terminals around New York Harbor and the main pipeline to the region from Gulf Coast refineries.

Motiva Enterprises LLC’s 255,000-barrel-a-day refinery in Convent, Louisiana, lost power yesterday, triggering units to shut down, according to a regulatory filing. The refinery was shut after the power loss, a person familiar with operations said.

“That is lending some support to the market,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “You still have to send those barrels up to the East Coast. The Hamas leader killed is also getting a lot of chatter.”

Gasoline Inventories

U.S. gasoline inventories probably fell 1 million barrels last week, according to the median estimate of 10 analysts in a Bloomberg survey. The Energy Department will report last week’s inventories tomorrow, a day later than usual because of the Nov. 12 Veterans Day federal holiday.

The average nationwide cost for regular gasoline climbed 0.3 cent to $3.443 a gallon, AAA said today on its website. It was the second consecutive increase. The pump price reached a 2012 high of $3.936 on April 4.

December-delivery heating oil rose 2.74 cents, or 0.9 percent, to settle at $2.9882 a gallon on the exchange. Supplies of distillates, including diesel and heating oil, fell 950,000 barrels last week, according to the survey.

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