Gasoline fell the most in a week after the Energy Information Administration reported a jump in inventories, imports and refinery inputs.
Futures sank 2.6 percent and crack spreads narrowed. Inventories along the East Coast rose for the first time in five weeks as imports jumped 64 percent. U.S. refiners processed the most oil in three months. The motor fuel’s discount to ultra-low-sulfur diesel increased. The May gasoline contract slipped to a discount to June.
“This was a bearish report,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania.
Gasoline for May delivery fell 7.73 cents to settle at $2.8651 a gallon on the New York Mercantile Exchange. Trading volume was 94 percent above the 100-day average at 2:56 p.m.
Futures settled below the 200-day moving average at $2.8855, a key technical support level.
“We’ve been holding a bearish bias for RBOB since the middle of March. Crossing back below the 200-day is certainly significant,” Schork said.
May gasoline is poised to go back and test support at the Dec. 7 intraday low of $2.7578, said Michael Smith, president of T&K Futures and Options Inc. in Port Saint Lucie, Florida.
“The technical charts are bearish as they are,” Smith said. “They just needed a fundamental push to get those longs out of the market and put them on the short side.”
The motor fuel was the worst performer today on the Standard & Poor’s GSCI index of 24 commodities, and is the worst this month.
The May crack spread versus WTI slipped $3.69 to $25.69 a barrel, the lowest since Jan. 25. The spread against Brent oil on ICE Futures Europe Exchange slipped $2.81 to $14.54, the smallest premium since Feb. 13.
Refineries ran at 86.8 percent of capacity, the highest level since the week ended Jan. 11, as refiners restarted production units after repairs ahead of the spring and summer driving season. Gasoline inventories last week were 2.2 percent above a year earlier.
May gasoline futures slipped to a 0.99-cent discount to June from an 0.37-cent premium yesterday, indicating ample supply.
“We have a surplus of gasoline, technically, gasoline is bearish and I think we will test $2.70 to $2.75, unless we get hit with unexpected refinery issues on the East Coast,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “We just have to stay below $2.90.”
Refiners processed 15.5 million barrels of crude and other feedstocks last week, the most since Jan. 4, the report from the statistical arm of the Energy Department showed.
Total U.S. gasoline inventories rose for the first time in nine weeks, gaining 1.7 million barrels to 222.4 million, according to EIA data. Imports to the East Coast jumped to 804,000 barrels a day, the highest level since August.
Inventories on the East Coast, or PADD 1, which includes New York Harbor, the delivery point for Nymex futures, increased 1.54 million barrels to 59.3 million, the highest level for this time of year since 2008.
Gasoline at the pump, averaged nationwide, fell 1.1 cents to $3.572 a gallon, AAA said today on its website. Prices have fallen 21.4 cents from the year-to-date high of $3.786 on Feb. 26 and are 35 cents below a year earlier.
Ultra-low-sulfur diesel for May delivery fell 1.34 cents, or 0.5 percent, to $2.9479 a gallon on volume that was 13 percent below the 100-day average. Gasoline’s discount to ULSD widened 6.39 cents to 8.28 cents a gallon, after narrowing the prior four days.
Total inventories of distillates, including diesel and heating oil, slipped 169,000 barrels to 112.8 million, EIA data show. East Coast supplies increased 477,000 barrels to 32.8 million.