Gasoline Falls Most in 10 Weeks as Brent Sinks After Crimea VoteBarbara Powell
Gasoline fell the most in 10 weeks, following Brent crude lower amid speculation that Crimea’s vote to leave Ukraine and join Russia won’t disrupt oil supplies.
Futures sank 2.7 percent, the most since Jan. 2. Brent slid 1.8 percent on the ICE Futures Europe exchange. Yesterday’s Crimean referendum paves the way for Russian President Vladimir Putin to annex Crimea, a move that is drawing sanctions from the West. Russia is the world’s biggest energy producer. Diesel futures sank to a four-month low.
“The market is not expecting any oil or natural gas disruption in Europe after the Crimea referendum and the products are being dragged down by crude prices,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
April-delivery gasoline fell 7.86 cents to $2.8811 a gallon on the New York Mercantile Exchange, the lowest settlement this month. Volume was 25 percent above the 100-day average at 4:16 p.m.
Brent oil for May settlement sank $1.97 to settle at $106.24 a barrel.
The government in Kiev, the European Union and the U.S. don’t recognize the outcome of the referendum to return Black Sea peninsula to Russia after 60 years of Ukrainian rule. President Barack Obama today imposed sanctions on seven top Russian government officials and four others from Ukraine, warning that Russia will face more penalties if it doesn’t pull back from Crimea.
“There’s a sigh of relief the sanctions weren’t on energy,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “There’s a reduction of geopolitical risks for oil.”
The motor fuel’s crack spread versus West Texas Intermediate crude dropped $2.49 to $22.93 a barrel. Its premium to Brent slipped $1.27 to $14.43 a barrel.
The average U.S. pump price rose 0.4 cent to $3.521 a gallon, the highest since Sept. 14, according to data from Heathrow, Florida-based AAA. Drivers are paying 16.5 cents less than a year ago.
Ultra low sulfur diesel for April delivery declined 5.23 cents, or 1.8 percent, to $2.8908 a gallon, the lowest settlement since Nov. 12. Volume was 5.2 percent below the 100-day average.
Diesel’s crack spread versus WTI narrowed $1.39 to $23.33 a barrel. The premium over Brent fell 12 cents to $14.65.