Gasoline followed crude oil lower as Iran expects to resume talks later this month with world powers over its nuclear program, easing concerns that Mideast oil production would be disrupted.
Futures fell as discussions will be held Feb. 25 in Kazakhstan, Iran Foreign Minister Ali Akbar Salehi said. The meeting would be the first talks since the breakdown last June of negotiations between Iran and the so-called P5+1, which includes the U.S., China, France, Germany, Russia and the U.K. The U.S. and Israel say Iran is pursuing atomic weapons.
“The entire market is under pressure with the announcement that Iran is going to meet with members of the P5+1,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The market is viewing it as a step to resolve the disagreement over Iran’s nuclear program.”
Gasoline for March delivery declined 4.21 cents, or 1.4 percent, to settle at $3.0115 a gallon on the New York Mercantile Exchange. Futures fell the most since Jan. 15 on volume that was 37 percent below the 100-day average for the time of day.
West Texas Intermediate oil for March delivery slipped $1.60 to a six-day low of $96.17 a barrel on the Nymex and the March Brent contract slid $1.16 to $115.60 a barrel on the London-based ICE Futures Europe exchange.
Futures also weakened as the euro fell 0.9 percent against the dollar at 2:44 p.m. in New York amid political turmoil in Europe, including calls for the resignation of Spanish Premier Mariano Rajoy after corruption allegations. A stronger dollar reduces the investment appeal of commodities.
“The dollar is definitely weighing on the market today,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.’’
Gasoline’s discount to the front-month heating oil contract widened 3.55 cents to 14.25 cents a gallon. The spread narrowed to 7.86 cents on Jan. 30 on speculation that seasonal maintenance and the closing later this month of Hess Corp.’s Port Reading, New Jersey, refinery would reduce supplies of the motor fuel along the East Coast.
“There were people playing that spread,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London. “A lot of that rally was concern about future supplies when demand picks up seasonally. Right now there is plenty of supply.”
Heating oil for March delivery declined 0.66 cent to settle at $3.154 a gallon on the Nymex. Volume was 2.8 percent below the 100-day average for the time of day.
The retail price for regular gasoline, averaged nationwide, rose 0.9 cent to $3.523 a gallon, the highest level since Oct. 29 said today on its website. Prices have climbed 7 percent this year and are 1.4 percent more than a year ago.