(For more on the shutdown, see EXT2.)
Oct. 1 (Bloomberg) -- Gasoline slid to a nine-month low on concern that the economy will weaken and fuel demand will decline as the U.S. government begins its first partial shutdown in 17 years.
Prices fell 0.7 percent. The stoppage, which comes after Congress failed to break a budget impasse by a midnight deadline, may idle as many as 800,000 federal employees, close national parks and halt some services. It will cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc.
“It looks like this decline is products-driven and that tells you people are worried about demand,” said David Pursell, a managing director at Tudor Pickering Holt & Co. LLC in Houston. “You wish these guys could get it together and come up with something soon, but this feels like it has the potential to last longer.”
Gasoline for November delivery fell 1.76 cents to $2.6106 a gallon on the New York Mercantile Exchange, the lowest settlement since Dec. 13. Trading volume was 22 percent below the 100-day average at 3:34 p.m.
The shutdown follows Congress’s failure to pass a stopgap spending bill before the country’s fiscal year ended yesterday. Congressional leaders have scheduled no further budget negotiations, raising concern among some lawmakers that the stoppage could bleed into the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17.
“The market is waiting to see if there will be a quick resolution,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “If the stalemate continues, the market will come under greater bearish pressure as the effects start to filter through the economy.”
The motor fuel’s crack spread versus West Texas Intermediate crude narrowed 45 cents to $7.61 a barrel. The fuel’s premium over Brent fell 31 cents to $1.71.
Gasoline supplies probably fell 700,000 barrels last week and stockpiles of distillates, including diesel and heating oil declined 1 million barrels, according to the median estimate of 12 analysts in a survey by Bloomberg. The Energy Information Administration is scheduled to report last week’s inventories at 10:30 a.m. tomorrow in Washington.
Pump prices, averaged nationwide, fell 0.6 cent to $3.393 a gallon, the lowest level since Jan. 28 and 38.9 cents below a year ago, Heathrow, Florida-based AAA said today on its website.
Ultra-low-sulfur diesel for November delivery fell 1.62 cents, or 0.6 percent, to $2.9553 a gallon, the lowest settlement since July 3. Trading volume was 8.7 percent above the 100-day average.
ULSD’s crack spread versus WTI narrowed 39 cents to $22.08 a barrel. The premium over Brent fell 25 cents to $16.18.
--With assistance from Roxana Tiron, Richard Rubin and Kathleen Hunter in Washington. Editors: David Marino, Richard Stubbe