Gasoline slid a second straight day on speculation that U.S. inventories climbed for the first time in three weeks. Crack spreads narrowed.
Futures fell 0.9 percent amid a broader commodity decline. An Energy Information Administration report tomorrow will probably show supplies rose 500,000 barrels, according to the median of 11 analyst estimates surveyed by Bloomberg. Refinery utilization increased 0.3 percentage points, the survey showed. The Standard & Poor’s GSCI Index of 24 materials declined 0.7 percent at 3:42 p.m. in New York.
“We’re looking at an expected build and you’re probably going to see higher production,” said Carl Larry, Houston-based president of Oil Outlooks & Opinions LLC.
Gasoline for July delivery fell 2.5 cents to settle at $2.8231 a gallon on the New York Mercantile Exchange in the first two-day decline since May 21. Trading volume was 11 percent below the 100-day average.
July gasoline’s crack spread versus West Texas Intermediate narrowed 66 cents to $23.19 a barrel. Gasoline’s premium over Brent slipped 6 cents to $15.61.
Gasoline jumped 3.3 percent last week after supplies declined in the week ended May 31.
“The market overbought itself in the wake of last week’s inventory report,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “Now it’s going to wait for tomorrow’s report.”
Gasoline also weakened today as Brent crude fell 1 percent on ICE Future Europe exchange, reducing the costs of products made with oil priced off the London benchmark. July Brent slipped to a 1-cent discount to August futures, indicating ample supplies.
“July-August Brent is in contango,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. “The outlook is pretty weak.”
Ultra-low-sulfur diesel for July delivery fell 2.63 cents, or 0.9 percent, to settle at $2.8575 a gallon on trading volume that was 20 percent below the 100-day average.
The July ULSD contract’s crack spread versus WTI narrowed 71 cents to $24.64 a barrel, while the premium over Brent fell 11 cents to $17.06.
Gasoline at the pump, averaged nationwide, declined 0.2 cent to $3.633 a gallon, Heathrow, Florida-based AAA, the nation’s largest motoring organization, said today on its website. Prices are 9.3 cents above a year earlier.