Gasoline futures dropped after a report that China’s manufacturing is expanding at a slower pace, indicating lower fuel demand, and Goldman Sachs Group Inc. cut its outlook for Brent crude prices. Crack spreads narrowed.
Prices fell 1.8 percent. The fuel’s crack spread versus June WTI declined $1.87 to $24.92 a barrel, the lowest since Jan. 23. The June spread versus Brent sank $1.80 to $13.79, the lowest level since Feb. 13. A preliminary Chinese Purchasing Managers’ Index for March showed a decline from the previous month.
“The general consensus is it’s still about demand, and it’s not getting better,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “Economic numbers are still tepid. I think the Goldman report is going to weigh on people.”
Gasoline for May delivery fell 5.04 cents to settle at $2.719 a gallon on the New York Mercantile Exchange on volume that was 10 percent above the 100-day average for the time of day.
Gasoline at the pump, averaged nationwide, fell 0.3 cent to $3.515 a gallon, AAA said today on its website. The Heathrow, Florida-based motoring organization said half of U.S. drivers find the price of gasoline too high at $3.44 a gallon, and more than 80 percent are driving less to offset the cost, based on results of a telephone survey.
Goldman Sachs cut its near-term outlook for Brent oil to $100 a barrel, from a previous outlook of $110 a barrel, and lowered its 2013 forecast to $105 a barrel from $110 a barrel.
Brent for June settlement fell 8 cents to $100.31 a barrel on the ICE Futures Europe exchange. WTI for June delivery slipped 1 cent to settle at $89.18 a barrel on the Nymex.
A preliminary Purchasing Managers’ Index for China released by HSBC Holdings Plc and Markit Economics came in at 50.5, compared with a final 51.6 for March. The number was also below the median 51.5 estimate in a Bloomberg News survey of 11 analysts. A reading above 50 indicates expansion.
In Europe, a composite index based on a survey of purchasing managers held at 46.5, London-based Markit Economics said today. It’s the 15th straight month below 50, which indicates contraction.
Gasoline stockpiles probably fell by 600,000 barrels to 221.1 million, according to the median of 11 analyst estimates before an Energy Department report tomorrow. Six respondents predicted a decrease, three a gain and two no change.
The refinery utilization rate may have climbed to 86.8 percent from 86.3 percent, according to the Bloomberg survey. The rate has been below 90 percent since Dec. 28.
The Bloomberg survey also forecast that inventories of distillate fuel, a category that includes heating oil and diesel, rose 500,000 barrels to 115.7 million. Seven analysts forecast a gain and four projected a drop.
Ultra-low-sulfur diesel for May delivery rose 0.23 cent to settle at $2.8117 a gallon on the Nymex. Trading volume was 24 percent below the 100-day average.
ULSD’s crack spread versus June West Texas Intermediate crude gained 12 cents to $28.34 a barrel. The June spread versus Brent gained 29 cents to $17.21.