Gasoline Jumps to Five-Week High on Shutdowns and Holiday DemandBarbara Powell
Gasoline rose to a five-week high on speculation that refinery shutdowns will crimp supplies as demand picks up over the May 26 Memorial Day holiday. Crack spreads widened.
Futures gained 0.9 percent. Midwest supplies sank to a five-month low last week as refineries processed the least crude and other feedstocks since November 1999, government data show. In California, BP Plc’s Carson refinery was said to shut a crude unit for unplanned work on May 15. Memorial Day is the traditional start of the peak driving season in the U.S.
“Gasoline has rallied on expectation of a good gasoline driving season while refiners have had operating issues on the West Coast and throughout the Midwest,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for June delivery increased 2.47 cents to $2.9069 a gallon on the New York Mercantile Exchange, the highest settlement since April 9. Trading volume was 8.7 percent below the 100-day average at 3:29 p.m. Prices rose 1.6 percent this week.
Inventories in Padd 2 are at the lowest seasonal level since 2008, Energy Information Data show. Refineries have cut production amid seasonal maintenance and unplanned shutdowns.
The fuel’s crack spread versus WTI widened 18 cents to $26.07 a barrel. Gasoline’s premium over July Brent increased 33 cents to $16.79.
The so-called summer driving season runs through the Labor Day holiday, which falls this year on Sept. 2.
“We’re getting closer to summer driving season,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The glitches are giving us a little bit of a bounce across the board.”
ULSD for June delivery rose 2.83 cents, or 1 percent, to settle at $2.937 a gallon on trading volume that was 8.3 percent below the 100-day average. Prices increased 1.1 percent this week.
The fuel’s crack spread versus West Texas Intermediate crude oil widened 32 cents to $27.33 a barrel. The premium over Brent crude gained 35 cents to $18.39.
Gasoline at the pump, averaged nationwide, rose 1.7 cents to $3.618 a gallon, AAA said today on its website. Prices have climbed 12 consecutive days to the highest level since April 4 and are 10.4 cents below a year earlier.