Gasoline Falls Most in Three Weeks on Speculation Supply to Rise

Gasoline slid the most in three weeks on speculation that motor fuel supplies will rise as refiners restart units after seasonal maintenance and begin processing burgeoning supplies of crude oil.

Futures dropped 2 percent from a two-week high. Refinery utilization rates have increased an average of 0.2 percentage point in November during the past five years, according to data from the Energy Information Administration. The industry-funded American Petroleum Institute reported yesterday that U.S. crude supplies climbed 5.94 million barrels in the week ended Oct. 11.

“When refiners return from maintenance, we will see utilization rise and gasoline inventories build once again,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for November delivery fell 5.42 cents to $2.6479 a gallon on the New York Mercantile Exchange, the lowest settlement since Oct. 9. Trading volume was 0.4 percent above the 100-day average at 3:20 p.m.

The EIA’s release schedule was disrupted by the 16-day partial government shutdown, which ended last night with approval by the House and the Senate of a bill that also raised the debt ceiling just as the U.S. was reaching its borrowing limit. The EIA will release the inventory report covering the week ended Oct. 11 on Oct. 21 at 10:30 a.m. in Washington.

Government Shutdown

Futures also fell on concern that the protracted shutdown may have damaged the economy and could be repeated within three months. The budget deal funds the government through Jan. 15, 2015 and suspends the debt limit until Feb. 7. Americans’ outlook for the U.S. economy in October was the most pessimistic in almost two years, according to the monthly Bloomberg Consumer Comfort Index.

“The market is digesting the fact that all we really bought ourselves was time, and we may see slow growth because of what has occurred,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

The motor fuel’s crack spread versus WTI narrowed 66 cents to $10.54. The premium to Brent fell $1.10 to $1.53 a barrel.

Pump prices, averaged nationwide, rose 0.3 cent to $3.36 a gallon, the third consecutive increase, Heathrow, Florida-based AAA said today on its website. Prices are 39.6 cents below a year ago.

Ultra-low-sulfur diesel for November delivery fell 4.93 cents, or 1.6 percent, to $2.99 a gallon, the lowest settlement since Oct. 1. Trading volume was 49 percent above the 100-day average.

ULSD’s premium versus WTI contracted 45 cents to $24.91 a barrel. The crack spread over Brent slipped 38 cents to $16.41.

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