Gasoline slid to a five-week low, following crude lower after U.S. unemployment benefits claims rose more than forecast. Crack spreads widened for the first time in a week.
Futures dropped a fifth straight day as jobless claims rose by 28,000 to 385,000 in the week ended March 30, the highest level since Nov. 24, Labor Department figures showed today. Gasoline’s crack spread versus WTI increased 55 cents to $28.49 a barrel. The May-June gasoline spread narrowed, indicating ample inventories.
“There’s an unease on the macro side that the jobs number didn’t help,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “There’s also follow-through from this week of heavy selling.”
Gasoline for May delivery fell 1.53 cents, or 0.5 percent, to settle at $2.8987 a gallon on the New York Mercantile Exchange. Trading volume on the Nymex was 77 percent above 100-day average at 2:50 p.m.
West Texas Intermediate oil for May delivery declined $1.19 to $93.26 a barrel on the Nymex while Brent crude on the London ICE Futures Exchange dropped 77 cents to $106.34.
Gasoline’s spread over Brent gained 13 cents to $15.41 a barrel. The May contract’s premium to June gasoline narrowed 0.33 cent to 0.26 cent a gallon.
At the intraday low, futures dropped below the 100-day moving average of $2.8874 and the 200-day moving average of $2.8793.
“The selloff the last three days looks like a capitulation,” said Michael Smith, president of T&K Futures & Options in Port Saint Lucie, Florida. “It looks to me like it wants to go back to the $2.75 area.”
Prices have fallen 11 percent from the 2013 intraday high of $3.2672 reached on March 11. Gasoline climbed 10 percent this year through March, the smallest first-quarter gain in five years.
Gasoline is down 6.7 percent this week following the Commodity Futures Trading Commission’s March 29 Commitments of Traders report showing large speculators increasing their wagers on higher prices for gasoline and reducing their bullish bets on ULSD.
“People are liquidating their positions and that is aggravating the situation,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.
Ultra-low-sulfur-diesel for May delivery fell 3.84 cents, or 1.3 percent, to $2.9636 a gallon on volume that was 43 percent above the 100-day average at 2:58 p.m.
ULSD’s premium to gasoline narrowed by 2.31 cents to 6.49 cents a gallon after the Energy Information Administration reported the refiners raised distillate output 2.9 percent to 4.32 million barrels a day, the highest level in five weeks.
“The production numbers yesterday were all leaning toward distillate,” said Carl Larry, a commodities broker at Atlas Commodities LLC in Houston.
Gasoline at the pump, averaged nationwide, fell 0.4 cent to $3.636 a gallon, AAA said today on its website. Prices are 29.2 cents below a year earlier after falling in March for the first time in 10 years, according to AAA data.