March 19 (Bloomberg) -- Gasoline fell the most in almost three weeks as Brent crude oil tumbled. Gasoline’s crack spread over WTI narrowed to the lowest level in about a month.
Futures lost 2.7 percent as Brent slid amid a recovery in North Sea oil production, the imminent return of South Sudan oil exports and the rejection of a levy on bank deposits in Cyprus. The fuel’s premium to crude shrank on speculation refiners will raise output after seasonal maintenance.
“Brent is clearly being impacted by the events in Cyprus and concerns over the economy in Europe and the return of North sea oil production and exports from the Sudan,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for April delivery fell 8.38 cents to $3.0451 a gallon on the New York Mercantile Exchange, the lowest settlement since Feb. 28, on trading volume that was 15 percent above the 100-day average for the time of day.
Cypriot lawmakers rejected an unprecedented tax on bank deposits, dealing a blow to European plans to force savers to shoulder part of the country’s bailout in a standoff that risks renewed tumult in the euro area.
The April crack spread versus WTI narrowed $1.94 to $35.73 a barrel. The May spread against Brent oil on ICE Futures Europe Exchange fell $1.19 to $20.24.
Brent oil for May delivery tumbled $2.06, or 1.9 percent, to $107.45 a barrel on the London ICE Futures exchange. The premium of Brent over West Texas Intermediate dropped 47 cents to $14.93 a barrel, and touched $14.67, the smallest gap since Jan. 17.
Gasoline futures fell as low as $3.0327 a gallon on speculation that supplies will increase as refineries complete spring maintenance and boost production to take advantage of healthy profit margins.
Planned turnarounds between January and March took 1.13 million barrels a day of crude processing capacity offline, according to IIR Energy, a Sugar Land, Texas-based energy-information provider. From April to June, that figure will drop to 676,000 barrels.
“U.S. refineries are starting to come back from turnaround and that is definitely impacting product markets,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.
Gasoline output rose 4 percent to 8.95 million barrels a day in the week ended March 8 even as refiners processed the least amount of oil in almost two years, Energy Information Administration data show.
“These are good refinery margins and when refineries come out of maintenance, gasoline supplies should increase,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
The EIA is scheduled to report last week’s inventories tomorrow. The agency will probably say gasoline stockpiles declined 2 million barrels while distillate supplies fell 1 million, according to the median of 11 analyst estimates compiled by Bloomberg.
Heating oil for April delivery declined 6.26 cents, or 2.1 percent, to $2.8641 a gallon, the lowest settlement since Aug. 2, on volume that was 55 percent above the 100-day average for the time of day.
Gasoil for April delivery declined $13 to settle at $900 a metric ton on ICE.
“Gasoil is very weak in Europe and that is affecting heating oil,” Sen said.
Gasoline at the pump, averaged nationwide, rose 0.7 cent to $3.692 a gallon, AAA said today on its website. It was the first increase in six days. Prices have dropped 9.4 cents since reaching year-to-date high of $3.786 on Feb. 26 and are 15 cents below a year ago.
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