Gasoline Futures Tumble as East Coast Supplies Increase

Gasoline fell the most in four weeks after the government reported East Coast supplies of the motor fuel increased to the highest level in more than a year. Crack spreads narrowed.

Futures dropped 3 percent. Gasoline inventories in PADD 1, which includes the New York Harbor delivery point for futures contracts, grew 1.18 million barrels to 61.7 million, the highest level since March 9, 2012. Stockpiles are 14 percent above the five-year seasonal average.

“Right now, people are trading that PADD 1 number to lower prices,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston.

Gasoline for June delivery tumbled 8.27 cents to settle at $2.7193 a gallon on the New York Mercantile Exchange on volume that was 4 percent below the 100-day average. Futures fell the most in a day since April 3.

The fuel’s premium over June West Texas Intermediate slipped $1.04 to $23.18 a barrel. The spread to Brent weakened $1.05 to $14.26.

East Coast refineries processed the most crude and other feedstocks since the week ended Oct. 12, EIA data show.

Gasoline inventories nationwide fell 1.82 million barrels, more than the 900,000 barrels that was the median estimate of 11 analysts surveyed by Bloomberg.

Distillate Inventories

Distillate inventories grew by 440,000 barrels, more than the increase of 250,000 barrels estimated by analysts.

Ultra-low-sulfur diesel for June delivery dropped 5.07 cents, or 1.8 percent, to $2.7889 a gallon on the Nymex. Trading volume was 8.1 percent below the 100-day average.

The fuel’s crack spread versus June West Texas Intermediate crude widened 30 cents to $26.10 a barrel. The spread versus Brent gained 29 cents to $17.18.

Futures sank earlier on concern weaker economic growth may limit fuel demand. Chinese and Australian reports today signaled a slowdown in manufacturing as a U.K. Purchasing Managers’ Index showed a third month of contraction. ADP Research Institute said U.S. companies added 119,000 workers to payrolls in April, less than the median forecast of 150,000 jobs.

“The China PMI data was disappointing,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “It’s just a continuation what we’ve been seeing in the last four to six weeks. Every macroeconomic data point is suggesting a slowing global economy.”

Gasoline at the pump, averaged nationwide, rose 1.4 cents to $3.522 a gallon, AAA said on its website today. It’s the largest single-day increase since Feb. 19.

Before it's here, it's on the Bloomberg Terminal.