Gasoline futures declined for a third day in New York Thursday, the first three-day drop since December. April’s premium to May widened.
March futures settled 0.8 percent lower after dropping as much as 2.7 percent before the Energy Information Administration said supplies sank 2.88 million barrels to 230.4 million. Analysts in a Bloomberg survey projected a 900,000-barrel decline. Refinery rates and imports declined while demand rose.
“This is what is supposed to happen during refinery maintenance season,” said David Pursell, a managing director at Tudor Pickering Holt & Co. LLC in Houston. “You should draw products and build crude so normal is good. And the trailing demand numbers are starting to looking pretty good.”
March-delivery gasoline fell 2.3 cents to $3.0365 a gallon on the New York Mercantile Exchange on volume that was 15 percent above the 100-day average for the time of day. The fuel is up 8 percent this year, the second-best performer, after cotton, on the Standard & Poor’s GSCI index of 24 commodities.
The April-May spread increased 0.86 cent to 3.71 cents a gallon, indicating expectation that inventories will fall as seasonal maintenance continues. Refineries used 82.9 percent of capacity last week, down 0.9 percentage point from the prior week and the lowest level in 11 months.
Gasoline fell less than crude futures, which tumbled as inventories climbed to the highest level since July. The March crack spread versus West Texas Intermediate oil on Nymex gained $1.35 to $42.99 a barrel. The April spread against Brent crude on ICE Futures Europe rose $1.04 to $22.30.
“Worries about gasoline supplies are likely to persist for some time,” Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London, said in a report Thursday after the inventory data were released.
Before the report’s 11 a.m. release in Washington, prices touched $2.9782, 19.06 cents below the intraday high from two days ago.
“Gasoline had had an extraordinary rise over the last five weeks,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “As refiners return from maintenance over the next couple of weeks and supplies improve, those who went long are going to be liquidating their positions.”
East Coast inventories of RBOB rose 560,000 barrels to 18.6 million, the highest level since March. Gasoline imports fell 26 percent to 447,000 barrels a day, the lowest level in four weeks.
Demand, measured by deliveries to wholesalers, rose 0.4 percent to 8.44 million barrels a day. Demand over four weeks was 2.8 percent above a year earlier.
Retail gasoline, averaged nationwide, rose 1.2 cents to $3.778 a gallon, the highest level since Oct. 14, AAA said Thursday on its website. Pump prices have gained every day since Jan. 17, advancing 48.5 cents.
Prices have jumped 15 percent this year to within 15.8 cents of last year’s high of $3.936. Prices may peak earlier than they did last year, Avery Ash, a spokesman for AAA, the nation’s largest motoring organization, said in an interview Tuesday.
Heating oil for March delivery fell 6.06 cents, or 1.9 percent, to settle at $3.0957 a gallon on the exchange on volume that was 0.8 percent above the 100-day average.
Distillate fuel stockpiles, including diesel and heating oil, sank 2.28 million barrels to 123.6 million, an eight-week low. Demand fell 134,000 barrels a day to 3.81 million and over four weeks was 5.5 percent higher than a year earlier.
© Copyright 2015 Bloomberg News. All rights reserved.