Gasoline rose as the Energy Department reported that East Coast stockpiles of the motor fuel slid last week to a four-year low and U.S. demand increased.
Futures gained as the report showed the continuing impact of Hurricane Sandy, whose Oct. 29 landfall in New Jersey closed refineries and pipelines, disrupting the supply of gasoline on the East Coast. Inventories in the Padd 1 region fell 1.54 million barrels to 45.1 million. U.S. demand rose 7.2 percent to 8.91 million barrels a day.
“The numbers were bullish,” said David Pursell, a managing director at Tudor Pickering Holt & Co. LLC in Houston. “You had a gasoline draw and demand was up even given how terrible demand must be in the Northeast.”
Gasoline for December delivery rose 1.72 cents, or 0.6 percent, to settle at $2.6962 a gallon on the New York Mercantile Exchange.
Gulf Coast inventories rose 922,000 barrels to 76 million, the most since September 2011. Total U.S. supply fell 440,000 barrels to 201.9 million.
December-delivery heating oil fell 1.47 cents, or 0.5 percent, to $2.9735 a gallon on the exchange.
Heating oil slid on concern President Barack Obama won’t reach a budget agreement with a divided Congress and U.S. economic growth will stall, curtailing industrial and trucking fuel demand.
Futures fell along with equities as Wal-Mart Stores Inc., the world’s largest retailer, forecast fourth-quarter profit that trailed analysts’ estimates. Obama will meet with Democratic and Republican congressional leaders tomorrow to try to avert $607 billion in automatic tax increases and spending cuts scheduled to take effect next year.
“The Wal-Mart news and the goings-on between Congress and the government are weighing on the market,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The concern is they will be unable to make a big grand compromise.”
The Standard & Poor’s 500 Index and the Dow Jones Industrial Average fell 0.2 percent at 2:23 p.m. in New York.
Heating oil touched $3.016 earlier as fighting between Israel and Palestinian militants boosted Brent crude. Rising Brent prices increase the cost of imported oil used by U.S. refiners.
“You had geopolitical worries and now it’s the fiscal cliff again,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consultant in London.
Distillate supplies, which include heating oil and diesel, fell 2.54 million barrels to 115.5 million in the seven days ended Nov. 9, the lowest level since June 2008.
“It is quite supportive and we’re still a month away from winter,” said Lipow.
The average nationwide cost for regular gasoline slipped 0.5 cent to $3.438 a gallon, AAA said today on its website. The pump price reached a 2012 high of $3.936 on April 4.