Gasoline Reaches Five-Month High on Low East Coast Supply
Gasoline rose to a five-month high as refinery maintenance in the Atlantic Basin stoked concerns about supplies in New York Harbor.
Prices rose as refineries in Canada, Wales and the Netherlands that supply the U.S. East Coast reduced fuel production. Supplies in the region, which includes New York Harbor, the delivery point for futures contracts, are the lowest in almost four years, Energy Department data show.
“The underlying reason for the gasoline rally is the refinery maintenance program,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Concerns about really tight supplies are going to hang over the market for the next couple months.”
Gasoline for October delivery rose 6.74 cents, or 2.1 percent, to $3.2117 a gallon at 1:01 p.m. on the New York Mercantile Exchange. Prices touched $3.25, the highest intraday level since April 17.
Futures are up 3.4 percent for the month and 18 percent this quarter.
The more actively traded November contract gained 1.19 cents, or 0.4 percent, to $2.9091. October gasoline and heating oil contracts will expire at the end of floor trading today. The premium of October over November increased to 30.26 cents a gallon, the widest gap between the front two contracts since Aug. 31, 2005.
U.S. gasoline inventories fell 481,000 barrels to 195.8 million barrels last week, the ninth consecutive decline and the lowest level since October 2008, according to department data. Output slid 2.1 percent to the lowest level in 10 weeks.
Royal Dutch Shell Plc (RDSA)’s 400,000-barrel-a-day Pernis plant in the Netherlands is conducting maintenance until early November. Irving Oil Corp. is performing maintenance on sections of the 298,800-barrel-a-day Saint John refinery in New Brunswick, which exports more than half of its output to the U.S. East Coast. Valero Energy Corp. (VLO) shut all the main production units at its Pembroke refinery in Wales while the plant’s only crude unit undergoes an eight-week turnaround.
October-delivery heating oil rose 0.67 cent to $3.164 a gallon on the exchange. Prices are down 0.2 percent this month and have gained 17 percent since June. The November contract gained 0.28 cent to $3.1536.
Regular gasoline at the pump, averaged nationwide, fell 0.8 cent to $3.787 a gallon yesterday, AAA data show. Prices have fallen 13 of the past 14 days, declining 2.2 percent in that span. Prices reached a 2012 high of $3.936 on April 4.
To contact the reporter on this story: Dan Murtaugh in Houston at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com