June 14 (Bloomberg) -- Gasoline and ultra-low-sulfur diesel followed crude higher amid concern that President Barack Obama’s decision to arm Syrian rebels will escalate tension in the region and disrupt oil supplies. Crack spreads were mixed.
Futures rose after reports that the U.S. will provide small arms and ammunition to the Syrian opposition and that the Obama administration confirmed President Bashar al-Assad’s forces used chemical weapons. Iranians voted today for a president to replace Mahmoud Ahmadinejad.
“This is all on the back of the Obama administration announcing they will begin to arm the Syrian rebels and fears in the market this will ultimately lead to a wider conflict throughout the region,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for July delivery rose 3.54 cents, or 1.2 percent, to $2.8967 a gallon on the New York Mercantile Exchange, the highest settlement since May 20. Trading was 12 percent below the 100-day average at 3:02 p.m.
Prices rose for a second week, by 0.9 percent. Gasoline has gained 3 percent this year.
July gasoline’s crack spread versus West Texas Intermediate widened 33 cents to $23.81 a barrel. Gasoline’s premium over Brent fell 19 cents to $15.73.
West Texas Intermediate for July delivery on the Nymex climbed $1.16, or 1.2 percent, to $97.85, the highest settlement since Jan. 30. London benchmark Brent crude for August delivery gained 98 cents to $105.93.
“This early surge was on Middle East tensions and the news we are arming the region,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.
Gasoline at the pump, averaged nationwide, fell 0.7 cent to $3.625 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 9.3 cents above a year earlier.
Ultra-low-sulfur diesel for July delivery rose 2.27 cents, or 0.8 percent, to settle at $2.9622 a gallon on trading volume that was 5.7 percent above the 100-day average. Prices are up 2.4 percent this week and down 2.7 percent this year.
The July ULSD contract’s crack spread versus WTI narrowed 21 cents to $26.56 a barrel. The premium over Brent fell 73 cents to $18.48.
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