Dec. 20 (Bloomberg) -- Heating oil futures gained in New York amid cooler weather forecasts and as inventories remain below the 10-year average.
Prices rose 0.7 percent as the U.S. National Oceanic and Atmospheric Administration’s 8- to 14-day forecast showed warmer-than-normal weather dropping back to normal in parts of the Northeast. U.S. distillate inventories fell 1.09 million barrels last week to 111.7 million, 14 percent below the 10-year seasonal average, Energy Department data show. Heating oil supplies sank 1.6 million barrels.
“Looking at yesterday’s report, there was a draw of heating oil by more than a million barrels, which leaves us very, very tight on heating oil inventory as we head into the winter,” Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York, said in a phone interview. “With the combination of low inventories and the prospect of demand increases from colder weather, an upward movement in price is expected.”
Heating oil for January delivery rose 2.19 cents to $3.0575 a gallon on the New York Mercantile Exchange, the highest settlement since Nov. 23.
Gasoline for January delivery gained 1.12 cents, or 0.4 percent, to settle at $2.7543 a gallon on the Nymex.
Traders may be capitalizing on high refinery run rates to purchase gasoline before first-quarter turnarounds begin, Carl Larry, president of Oil Outlooks & Opinions LLC, said from Houston by phone.
“They’ve been putting up so much refinery production the last couple weeks, people afraid they’re going to start maintenance and supplies are going to be tight,” he said.
Refineries processed 15.9 million barrels of crude and other feedstocks last week, the DOE said. That’s the highest level for this time of year in a decade, according to data compiled by Bloomberg.
The average nationwide cost for regular gasoline sank 0.7 cent to $3.219 a gallon, AAA said today on its website. That’s the 28th straight day of falling prices and the lowest level since Dec. 21, 2011.
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