Gasoline gained the most in two months after a report that inventories fell and demand jumped to the highest since August as retailers prepared for July 4 holiday drivers.
Futures rose 2 percent to a two-week high. The Energy Information Administration reported that gasoline supplies sank 1.72 million barrels to 223.7 million barrels, the biggest decline since the week ended April 26. Stockpiles remained the highest for this time of the year since 1992. Demand, which typically increases during the summer as more Americans go on vacation, rose 4.5 percent to 9.29 million barrels a day.
“We’re going into the peak of summer driving,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
August-delivery gasoline gained 5.49 cents to $2.8382 a gallon on the New York Mercantile Exchange on trading volume that was 6.4 percent below the 100-day average at 2:56 p.m. It was the biggest jump since May 2.
Gasoline’s crack spread versus WTI widened 67 cents to $17.96 a barrel. The fuel’s premium over Brent gained 55 cents to $13.44.
Futures were up before the inventory’s 10:30 a.m. release in Washington as West Texas Intermediate crude topped $100 for the first time in nine months on concern that the political uprising in Egypt will disrupt oil shipments. Crude for August delivery on the Nymex settled at a 14-month high of $101.24 a barrel.
“When you set a time deadline, it really raises the anxiety level.” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “We’re all watching. If they closed Suez, it would be a major disruption.”
Egypt’s army replaced Egyptian President Mohamed Mursi today with an interim head of state, the head of Constitutional Court, Defense Minister Abdelfatah Al-Seesi, said in a television speech. Earlier, Mursi defied protests calling for his resignation. The army said July 1 it would impose its own plan if the crisis wasn’t resolved within 48 hours. Mursi made a last-ditch bid to retain power with a call for an interim coalition government.
Gasoline widened gains when WTI touched $102.18, the highest intraday price since May 2012, after the EIA reported that crude supplies fell 10.3 million barrels to 383.8 million and refinery utilization jumped 2 percentage points to 92.2 percent, the most since August.
Refiners processed the most crude and other feedstocks since August 2005 last week. The increase comes as operable refinery capacity has jumped 3.4 percent from 2012 to 17.8 million barrels a day, according to EIA data. Motiva Enterprises LLC more than doubled the capacity of its Port Arthur, Texas, refinery to about 600,000 barrels a day.
“The increase in inputs is something we’ve been expecting,” said Eric Lee, an oil analyst at Citi Research in New York. “We’ve had expansion in refinery capacity like Motiva Port Arthur. You can explain the product draws as just stocking up ahead of the holiday weekend. And some of that implied demand is export demand, which has been particularly high the last few weeks.”
Pump prices, averaged nationwide, fell 0.1 cent to $3.477 a gallon, Heathrow, Florida-based AAA said today on its website. Retail costs have retreated 21 consecutive days, dropping to the lowest level since Jan. 31.
Ultra-low-sulfur diesel, or ULSD, for August delivery rose 4.98 cents, or 1.7 percent, to $2.9512 a gallon on trading volume that was 4.3 percent below the 100-day average.
ULSD’s crack spread versus West Texas Intermediate crude increased 45 cents to $22.71 a barrel. The premium over Brent widened 33 cents to $18.19.
Distillate inventories fell 2.42 million barrels to 120.8 million. Distillate demand rose 14 percent from the prior week to 4.45 million barrels a day, the highest level since April 2008.