Gasoline capped the biggest monthly increase since March 2012, part of a broader commodities rally amid signs the U.S. economy is strengthening and as the Federal Reserve maintained its bond-buying pace.
Gasoline rose 11 percent this month, the best performer in the Standard & Poor’s GSCI commodity index. The GSCI gained 1 percent today as gross domestic product increased more than forecast in the second quarter and the Fed said it would maintain its $85 billion monthly bond buying.
“This is definitely bullish for commodities,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant.
Gasoline for August delivery rose 2.57 cents, or 0.9 percent, to settle at $3.0442 a gallon on the New York Mercantile Exchange. Trading volume was 11 percent below the 100-day average at 3:45 p.m.
The more actively traded September contract gained 2.13 cents to $2.9963 a gallon.
The U.S. central bank also said at the end of a two-day meeting in Washington that persistently low inflation could hamper the expansion.
“The inflation level is still low enough to make them nervous and there is no hint of tapering,” said Schenker.
Gasoline touched a low of $2.9715 at 10:37 a.m. after the Energy Information Administration reported that U.S. inventories rose 770,000 barrels to 223.5 million. Stockpiles in the PADD 1B region, which includes New York Harbor, the delivery point of Nymex gasoline and ultra-low-sulfur diesel contracts, grew 537,000 barrels to 29.5 million.
The motor fuel rallied as West Texas Intermediate crude jumped 1.9 percent after the EIA reported that crude supplies at Cushing, Oklahoma, dropped 1.9 million barrels to 42.1 million, a 15-month low.
Gasoline’s crack spread versus WTI fell $1.06 to $20.81 a barrel. The fuel’s premium to Brent rose 10 cents to $18.14.
“Look at the crack spreads and you see it’s really crude leading the way,” said Joe Posillico, senior vice president of energy derivatives at Jefferies Bache LLC in New York. “The macro data was rather strong today. We keep getting draws in Cushing.”
U.S. gross domestic product, the value of all goods and services produced, rose at a 1.7 percent annualized rate in the second quarter, after a 1.1 percent gain the prior quarter, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for a 1 percent advance. Consumer spending, the biggest part of the economy, climbed 1.8 percent after increasing 2.3 percent in the previous period.
U.S. companies added 200,000 jobs in July, figures from the Roseland, New Jersey-based ADP Research Institute showed. The median forecast of 40 economists surveyed by Bloomberg called for a 180,000 gain.
Pump prices, averaged nationwide, rose 0.3 cent to $3.627 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 12.7 cents higher than a year ago.
Ultra-low-sulfur diesel for August delivery gained 3.64 cents, or 1.2 percent, to settle at $3.0431 a gallon on trading volume that was 6.6 percent above the 100-day average. Prices rose 5.7 percent this month. The September contract advanced 4.6 cents to $3.055.
Supplies of distillates fell 466,000 barrels to 126 million as production declined 3.4 percent to 4.83 million barrels a day, the lowest level in six weeks.
ULSD’s crack spread versus West Texas Intermediate crude narrowed 2 cents to $23.28 a barrel. The premium over Brent increased $1.14 to $20.61.