Gasoline Caps Biggest Weekly Gain Since February on Jobs Report

Gasoline futures rose, extending the largest weekly gain in four months, as equities advanced after a Labor Department report that the U.S. added more jobs than forecast last month. Crack spreads narrowed.

Prices advanced as the Standard & Poor’s 500 Index rallied 1.2 percent after a report showing a employment increase of 175,000 in May was balanced by an uptick in the jobless rate, indicating the U.S. Federal Reserve may not see enough improvement in the labor market to warrant reducing its economic stimulus efforts.

“On balance, the report has been viewed as positive, but not strong enough for the Fed to change its action,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.

Gasoline for July delivery rose 2.06 cents, or 0.7 percent, to settle at $2.8715 a gallon on the New York Mercantile Exchange. Trading volume was close to the 100-day average. Gasoline rose 3.3 percent on the week, the most since the period ended Feb. 1.

July gasoline’s crack spread versus West Texas Intermediate narrowed 40 cents to $24.57 a barrel. Gasoline’s premium over Brent slipped 8 cents to $16.04.

The unemployment rate rose to 7.6 percent from 7.5 percent as more people entered the labor force. The household survey, used to calculate the jobless rate, showed a 420,000 jump in the size of the labor force, exceeding the 319,000 gain in employment and pushing up the jobless rate from a four-year low.

Federal Reserve

Fed Chairman Ben S. Bernanke and other central bankers have said the labor outlook must improve “substantially” for the Fed to consider reducing its current pace of asset purchases. Pacific Investment Management Co.’s founder Bill Gross said the Fed is unlikely to reduce its asset purchases after the unemployment rate climbed from a four-year low in May.

“The jobs report came in more or less as expected, not off-trend enough to think the Fed is going to change its policy, and traders are more focused on the Fed than fundamentals,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.

Ultra-low-sulfur diesel for July delivery rose 2.17 cents, or 0.8 percent, to $2.8931 a gallon, and gained 3.6 percent on the week. Trading volume was 10 percent above the 100-day average.

The July ULSD contract’s crack spread versus West Texas Intermediate crude oil narrowed 36 cents to $25.48 a barrel, while the premium over Brent decreased 4 cents to $16.95.

Gasoline at the pump, averaged nationwide, rose 0.3 cent to $3.633 a gallon, Heathrow, Florida-based AAA, the nation’s largest motoring organization, said today on its website. Prices are 7.3 cents above a year earlier.

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