Gasoline rose for the first time in four days and pump prices moved closer to last year’s highs. Crack spreads and the April contract’s premium to later months increased.
March futures advanced 1.4 percent. The Energy Information Administration said yesterday supplies sank 2.88 million barrels last week as refinery rates and imports declined while demand increased. Average retail prices rose 0.3 cent to $3.781 a gallon. The fuel has jumped 15 percent this year to within 15.5 cents of last year’s high of $3.936, according to AAA data.
“Gasoline has been rallying since the EIA showed a bigger-than-expected draw in gasoline inventories, and refinery utilization dropped as we’re in the midst of the refinery maintenance season,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “But higher pump prices will definitely put a damper on consumer spending.”
March-delivery gasoline rose 4.31 cents to settle at $3.0796 a gallon on the New York Mercantile Exchange.
Gasoline touched $3.1691 on Feb. 19, the highest level since Sept. 28, then slid to $2.9782, dropping below the 20-day moving average for the first time since Jan. 18 before settling above the average. Today’s price stayed above that average.
“That looks like a failed selloff to me,” said Michael Smith, president of T&K Futures & Options in Port Saint Lucie, Florida. “If on Monday we’re able to go higher again, the bullish trend is still intact.”
The fuel is up 9.5 percent this year, the best performer on the Standard & Poor’s GSCI index of 24 commodities. Gasoline pared its yearly gain this week as it lost 1.8 percent, slipping three days of the past four.
The April crack spread, or premium of gasoline over West Texas Intermediate crude on Nymex, widened $1.04 to a record $44.03 a barrel. Against Brent oil on ICE Futures Europe, the spread gained 76 cents to $23.06 a barrel. The April-September gap widened 2.14 cents to 29.09 cents a gallon.
“We stopped the decline,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “But fundamentals are about the change for gasoline. Production is set to rise fairly dramatically over the next couple of months and these high pump prices are not going to be encouraging for demand.”
U.S. refinery seasonal maintenance typically peaks in March and April.
Refineries used 82.9 percent of capacity last week, down 0.9 percentage point from the prior week and the lowest level in 11 months, EIA data show. Gasoline imports slipped to a four-week low.
Demand, measured by deliveries to wholesalers, rose 0.4 percent to 8.44 million barrels a day. Demand over four weeks was 2.8 percent above a year earlier.
Heating oil for March delivery gained 0.85 cent to $3.1042 a gallon. Prices declined 3.3 percent this week.