Gasoline slid to a two-week low, recording the biggest weekly loss in nine months as U.S. inventories rose and winter storms may reduce demand.
Inventories climbed 844,000 barrels to 220.7 million in the week ended Dec. 27, the Energy Information Administration reported. Stockpiles have risen five of the last six weeks, increasing 5.7 percent to the highest level since August. Snow and frigid temperatures in the U.S. Northeast and Midwest may keep drivers off the road.
“We are going into a lower demand period for sure and supplies are comfortable,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.
Gasoline for February delivery fell 4.62 cents, or 1.7 percent, to $2.6488 a gallon on the New York Mercantile Exchange, the lowest settlement since Dec. 17. Trading volume was 4.7 percent below the 100-day average at 3:15 p.m. Prices have declined 5.9 percent since Dec. 27, the biggest weekly retreat since April 5.
New York and New Jersey governors declared weather-related states of emergency. Manhattan’s Central Park had received 6 inches (15 centimeters) of snow by 7 a.m., according to the National Weather Service. Boston’s Logan International Airport reported 14.6 inches, said Nicole Belk, a weather service meteorologist in Taunton, Massachusetts. Chicago is expected to have a high of minus 4 degrees Fahrenheit (minus 20 Celsius) on Jan. 6, the service forecast.
Demand for gasoline slipped 3.1 percent to 8.89 million barrels last week.
“The market is under pressure because the snowstorms and poor weather are impacting demand,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
East Coast supplies climbed 1.02 million barrels to 57.2 million, the highest seasonal level in four years, as refinery utilization jumped to 85.1 percent from 80.9 percent the prior week. East Coast, or PADD 1, gasoline imports slid 44 percent to 240,000 barrels a day, the lowest level since November 2012.
The motor fuel’s crack spread versus WTI, a rough measure of refining profitability, narrowed 46 cents to $17.29 a barrel. Gasoline’s premium to London-traded Brent crude fell $1.05 to $4.36 a barrel.
The average U.S. pump price climbed 0.1 cent to $3.326 a gallon, according to Heathrow, Florida-based AAA. Prices have risen for 15 consecutive days and are the highest since Oct. 23.
Distillate inventories jumped 5.04 million barrels to 119.1 million, the biggest one-week increase since Jan. 4, 2013, and highest level in nine weeks. PADD 1 distillate inventories increased 565,000 barrels to 35.3 million.
Ultra low sulfur diesel for February delivery fell 4.73 cents, or 1.6 percent, to $2.9394 a gallon, the lowest settlement since Nov. 19. Trading volume was 32 percent above the 100-day average. Prices have dropped 5.9 percent since Dec. 27 in the largest weekly decline since June 2012.
The fuel’s crack spread versus West Texas Intermediate crude fell 51 cents to $29.49 a barrel. The premium over European benchmark Brent narrowed $1.10 to $16.56.