Gasoline futures rose as President Barack Obama called on House Republican leadership to allow a vote on a funding bill that has already won Senate approval.
Prices gained 0.7 percent on speculation that Obama’s challenge to House Speaker John Boehner to prove he doesn’t have to the votes to pass the Senate bill will help end the seven-day-old partial government shutdown. The impasse has threatened to weaken the U.S. economy and reduce fuel demand.
“The fact that Obama is calling on the House to bring up the government funding bill today injects a sense of urgency and it seems potentially there could be some movement to resolving this,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.
Gasoline for November delivery rose 1.85 cents to $2.6261 a gallon on the New York Mercantile Exchange. Trading volume was 8 percent above the 100-day average at 3:39 p.m.
The deadline for raising the debt ceiling without incurring default on the U.S. debt is Oct. 17. A group of Republicans, backed by Boehner, have stalled a vote on the Senate funding bill, demanding that the Affordable Care Act be defunded as a condition for opening the government or raising the debt limit.
Boehner contends there aren’t enough votes in the GOP-controlled House to pass a so-called clean funding bill. Obama, a Democrat, said in a speech today at the Federal Emergency Management Agency that his party has already compromised on the budget level and that he won’t negotiate under “threat of economic catastrophe.”
At least 20 House Republicans have said they would vote for a clean spending measure passed by the Senate with no provisions related to the health-care bill to reopen government; 17 Republicans combined with all House Democrats would be enough to pass it.
“The oil market is concerned about the continued impact of the shutdown on petroleum product demand,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Futures slid earlier to $2.5629 a gallon earlier, the lowest intraday level since Nov. 5, before rebounding.
“With gasoline prices down below $2.60, how much further can they sell off?” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Gasoline may have retreated far enough that it’s due for another correction.”
The motor fuel’s crack spread versus West Texas Intermediate crude widened $1.59 to $7.27 a barrel. The fuel’s premium to Brent gained 56 cents to 62 cents.
Pump prices, averaged nationwide, fell 0.4 cent to $3.346 a gallon, the lowest level since Jan. 25 and 46 cents below a year ago, Heathrow, Florida-based AAA said today on its website.
Ultra-low-sulfur diesel for November delivery advanced 1.03 cents, or 0.3 percent, to $3.0093 a gallon on trading volume that was 8.8 percent above the 100-day average.
ULSD’s crack spread versus WTI widened $1.24 to $23.36 a barrel while the premium over Brent rose 21 cents to $16.71.