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Gasoline Rises to 4-Week High as Supply Hits One-Year Low

Nov. 14 (Bloomberg) -- Gasoline surged to a four-week high after the Energy Information Administration reported that U.S. stockpiles of the motor fuel dropped to the lowest level in almost a year.

Futures jumped 2.1 percent, the most since Oct. 10. Gasoline supplies fell 838,000 barrels to 209.2 million in the week ended Nov. 8, the lowest level since Nov. 23. Inventories have declined for five straight weeks, losing 4.9 percent in the longest string of declines since March.

“The drawdown in supply last week comes on top of a run in inventory declines,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Gasoline for December delivery advanced 5.57 cents to settle at $2.6837 a gallon on the New York Mercantile Exchange, the highest level since Oct. 16. Trading volume for all contracts was 55 percent above the 100-day average at 3:23 p.m.

Prices have jumped 7.2 percent since sinking to $2.5031 on Nov. 7, the lowest settlement since Dec. 19, 2011.

“There is demand down near $2.50,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Unless crude gets really hurt, we may have found a bottom for now.”

Stockpiles along the U.S. East Coast, referred to as PADD 1, which includes the delivery point for the Nymex contract, fell 1.21 million barrels to 52.8 million, the least since Dec. 28. Imports into the East Coast slipped 7.1 percent to 418,000 barrels a day.

Gasoline’s crack spread versus WTI widened $2.46 to $18.96 a barrel, the highest since Aug. 1. The fuel’s premium to Brent rose 92 cents to $4.18.

Pump Prices

U.S. pump prices, averaged nationwide, rose 0.8 cent to $3.194 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 24.9 cents below a year ago.

Distillate inventories, including heating oil and diesel, fell 481,000 barrels last week to 117.3 million. Supplies are the lowest since the week ended April 26. PADD 1 distillate stocks declined 620,000 barrels to 37.2 million.

Ultra-low-sulfur diesel for December delivery advanced 3.29 cents, or 1.1 percent, to $2.9306 a gallon on trading volume that was 11 percent above the 100-day average at 3:28 p.m.

ULSD’s premium over WTI widened $1.50 to $29.33 a barrel. The fuel’s crack spread versus Brent narrowed 3 cents to $14.55.

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

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

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