Gasoline Caps Biggest Monthly Gain Since July as Supplies Drop

Gasoline futures posted the biggest monthly gain since July as supplies declined amid seasonal maintenance.

Futures climbed 6.2 percent in February. U.S. gasoline inventories dropped 4.35 million barrels this month, according to Energy Information Administration data. Imports have fallen 55 percent while U.S. demand is 1 percent higher.

“There’s maintenance in the U.S. and inventories are tight in Europe,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. “You’re in a tight market heading into the summer demand season.”

Gasoline for March delivery gained 2.8 cents, or 1 percent, to settle at $2.7898 a gallon on the New York Mercantile Exchange, on volume that was 4 percent below the 100-day average as of 2:40 p.m.

March gasoline and ultra low sulfur diesel futures expired today. April futures, which represent summer-grade fuel that’s costlier to produce, settled at $2.9774 a gallon, giving the summer grade an 18.76-cent premium over winter-grade fuel.

“The outlook for the summer driving season may be better now given what we see in the further-out futures prices,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

The rally coincided with 5.2 percent gain in crude futures this month on Nymex.

“Crude oil prices have had a heck of a run since January,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “It helped drive crude products higher.”

Refinery Maintenance

An average of 1.9 million barrels a day of U.S. capacity has been offline in February for maintenance, according to Sen. Another 1.3 million barrels in March and 800,000 barrels in April are scheduled to be shut for work, Sen said.

The motor fuel’s crack spread versus West Texas Intermediate crude, a rough measure of refining profitability, widened 52 cents to $22.46 a barrel. Its premium to London-traded Brent crude rose 60 cents to $15.98.

The average U.S. pump price gained 1.2 cents to $3.448 a gallon, according to data from Heathrow, Florida-based AAA. Prices have risen 21 consecutive days to the highest level since Sept. 23. Drivers are paying 33.4 cents less than a year earlier.

Ultra low sulfur diesel for March delivery rose 0.28 cent to settle at $3.0893 a gallon on volume that was 14 percent below the 100-day average. The front-month contract declined 5.8 percent this month after February futures expired Jan. 31 at a 28.23-cent premium to March.

Diesel’s crack spread versus WTI widened 17 cents to $24.09 a barrel. The premium over European benchmark Brent rose 25 cents to $17.61.

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