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Gasoline Futures Advance as Reports Show Gains for U.S. Economy

March 26 (Bloomberg) -- Gasoline jumped to a four-day high as increases in durable goods orders and home prices indicated the U.S. economy is strengthening and fuel demand may improve.

Futures rose 1.6 percent as bookings for goods meant to last at least three years rose 5.7 percent in February, boosted by automobiles and a rebound in commercial aircraft, a Commerce Department report showed. Residential real estate prices increased in January by the most since June 2006, indicating the U.S. housing market strengthened at the start of the year.

“All of a sudden, the economy is looking a little better,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “People feel richer when the value of their house goes up and increased durable goods orders could mean better demand.”

Gasoline for April delivery rose 4.8 cents to settle at $3.1106 a gallon on the New York Mercantile Exchange on volume that was 13 percent above the 100-day average at 3:33 p.m.

The S&P/Case-Shiller index of property values in 20 cities climbed 8.1 percent in January from the same month in 2012 after rising 6.8 percent in the year ended in December, the group said today in New York.

“We’re seeing speculative buying of energy on the belief the economy is slowly but surely improving in the U.S. and other places globally,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.

Trainer Refinery

Prices also rose and crack spreads increased as Delta Air Lines Inc.’s Monroe Energy LLC subsidiary tried to restart a fluid catalytic cracker at its Trainer, Pennsylvania, refinery after a power loss late yesterday.

May gasoline’s premium over WTI widened 50 cents to $33.97 a barrel. The spread versus Brent widened 84 cents to $20.95. Brent’s premium over WTI narrowed 34 cents to $13.02 a barrel, the smallest gap since July.

Heating oil for April delivery rose 0.41 cent to settle at $2.8813 a gallon on volume that was 0.6 percent above the 100-day average.

Gasoline at the pump, averaged nationwide, fell 0.9 cent to $3.658 a gallon, AAA said today on its website. Prices have dropped for the past six days and are 23.9 cents below a year ago.

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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