Gasoline futures fell the most in three weeks as the end to a French refinery strike may increase imports of the motor fuel from Europe.
Prices slid 1 percent, the most since Dec. 9. Workers voted to terminate a walkout at Total SA’s Gonfreville refinery in France, the last of five to resume production, Eric Sellini, a CGT union representative, said on Dec. 27. Imports of gasoline into New York Harbor, the delivery point for the Nymex contract, sank 24 percent in the week ended Dec. 20, according to the Energy Information Administration.
“The return of all the French refineries to operations improves supplies in Europe and ultimately affects the markets in the U.S.,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for January delivery fell 2.84 cents to settle at $2.7877 a gallon on the New York Mercantile Exchange on trading volume that was 24 percent below the 100-day average at 3:46 p.m.
Futures have risen 3.9 percent in December, heading for the biggest monthly gain since July. Prices are down 0.9 percent this year.
January gasoline and ultra low sulfur diesel futures will expire at the close of floor trading tomorrow. The more actively traded February gasoline contract slid 2.26 cents to $2.7869 a gallon.
The labor strike in France started Dec. 13, disrupting output from Total’s five French refineries.
Futures also fell on speculation that higher production will boost supplies. Gasoline output jumped 4.3 percent to 9.72 million barrels a day in the week ended Dec. 20, the most in data going back to 1982, the EIA reported on Dec. 27, two days later than usual because of the Christmas holiday.
“Besides last-minute positioning ahead of the New Year, people are remembering that gasoline production was gigantic,” said Joe Posillico, senior vice president of energy derivatives at Jefferies Bache LLC in New York.
The EIA is scheduled to report last week’s inventory data on Jan. 3, two days later than usual because of the Jan. 1 New Year’s holiday. The report will probably show gasoline stockpiles rose 1.35 million barrels, according to the median estimate of six analysts in a survey by Bloomberg.
The motor fuel’s crack spread versus WTI, a rough measure of refining profitability, widened 8 cents to $17.76 a barrel. Gasoline’s premium to London-traded Brent crude rose 2 cents to $5.84 a barrel.
The average U.S. pump price climbed 0.3 cent to $3.312 a gallon, the 11th consecutive increase and the highest level since Oct. 24, according to Heathrow, Florida-based AAA.
ULSD for January delivery declined 4.69 cents, or 1.5 percent, to $3.0772 a gallon on volume that was 5.7 percent above the 100-day average. The futures have climbed 1 percent in December and are up 1.1 percent this year. February futures slipped 3.6 cents to $3.0561.
The survey projects that the EIA will report that supplies of distillates, including diesel and heating oil, increased 1 million barrels last week.
The fuel’s crack spread versus West Texas Intermediate crude narrowed 48 cents to $29.07 a barrel. The premium over European benchmark Brent fell 54 cents to $17.15.