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Gasoline Futures Slip From Highest in More Than Four Months

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Feb. 19 (Bloomberg) -- Gasoline retreated for the first time in three days, slipping from the highest level in more than four months.

March futures declined 0.4 percent. The contract pared losses and later-month delivery gained after Motiva Enterprises LLC shut the fluid catalytic cracker at its Port Arthur, Texas, refinery for unplanned repairs, a person familiar with operations said. The refinery is the largest in the U.S. Prices rose 2.5 percent last week on concern that refinery closures and seasonal maintenance would tighten supply.

“It’s another cat cracker down and not really what the market needs right now,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “This contributed to the comeback. March is off because it had been so strong.”

March gasoline declined 1.33 cents to settle at $3.1212 a gallon on the New York Mercantile Exchange on volume that was 11 percent above the 100-day average for the time of day.

Prices touched $3.102 before the report that Motiva was forced to shut the catalytic cracker overnight just as it’s beginning scheduled maintenance on at least three other production units.

April futures were up 0.14 cent to $3.3152, after falling as low as $3.2867. May gasoline rose 0.33 cent to $3.2812 a gallon. April and May contracts represent summer-grade gasoline, more costly to refine and blend.

The motor fuel has been the top performer this year on the Standard & Poor’s GSCI index of 24 commodities with an 11 percent gain.

Gasoline ’Overdone’

“The gasoline rally been overdone as refiners operate at higher rates than historically and gasoline stocks are adequate given the heavy turnaround schedule,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Over the next two to three weeks, refiners will return from their maintenance and improve the supply situation.”

The unplanned closure of the catalytic cracker occurred as the Gulf Coast refinery, the largest in the U.S., is conducting scheduled maintenance on a delayed coker, a sulfur recovery unit and the smallest of three crude units, known as VPS-2.

The discount to futures for immediate-delivery 87-grade gasoline on the Gulf Coast narrowed 2.75 cents to 0.25 cent, the strongest level since October.

Heating oil for March delivery fell 2.98 cents, or 0.9 percent, to $3.1806 a gallon, the lowest level in two weeks, on volume that was 7.3 percent above the 100-day average. Prices sank 0.9 percent last week, the first drop in five weeks.

“Heating oil stocks, while lower than last year, are adequate and we’re two-thirds of the way through the heating oil season,” Lipow said.

The retail price for regular gasoline, averaged nationwide, rose 1.8 cents to $3.748 a gallon, the highest level since Oct. 16, AAA said today on its website. Prices have risen every day since Jan. 17, advancing 45.6 cents.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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