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Gasoline Rises to Three-Month High on Bernanke Comments

July 11 (Bloomberg) -- Gasoline rose to a three-month high as Federal Reserve Chairman Ben S. Bernanke called for continuing monetary stimulus.

Futures increased a day after Bernanke said “highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy.” Gasoline jumped above $3 for the first time since April yesterday after a report that inventories dropped the most in 11 weeks and demand reached the highest level since August.

“Bernanke’s statement that they’re not going to pull back seems to have fostered another leg on the rally,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “But the market is overdone.”

August-delivery gasoline rose 0.65 cent to $3.0214 a gallon on the New York Mercantile Exchange, the highest settlement since April 2. Trading was 37 percent above the 100-day average at 3:22 p.m. Prices are up 9.8 percent this month, which would be the largest increase since March 2012.

“What drove this was gasoline demand,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

The Energy Information Administration reported yesterday that gasoline supplies fell 2.63 million barrels to 221 million, the least since May 31 and the biggest drop since April 19. Demand increased for a fourth week to 9.3 million barrels a day, the most since Aug. 10.

Gasoline’s crack spread versus WTI widened $1.88 to $21.99 a barrel. The fuel’s premium to Brent jumped $1.05 to $19.17.

Pump prices, averaged nationwide, rose 1.7 cents to $3.518 a gallon, Heathrow, Florida-based AAA said today on its website. That’s the highest price since June 26.

Ultra-low-sulfur diesel, or ULSD, for August delivery fell 0.67 cent to settle at $2.995 a gallon on volume that was 11 percent below the 100-day average.

ULSD’s crack spread versus West Texas Intermediate crude increased $1.33 to $20.88 a barrel. The premium over Brent widened 50 cents to $18.06 a barrel.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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