Dec. 3 (Bloomberg) -- Gasoline advanced as supplies in the New York Harbor area, where futures are delivered, are the lowest in 11 months.
Prices rose as stockpiles in the Central Atlantic area of the U.S. East Coast, or PADD 1 region, in the week ended Nov. 22 were the lowest since Dec. 14, Energy Information Administration data show. Spot gasoline in Chicago was 50 cents under New York Mercantile Exchange futures for a second day, the lowest since February 2012, according to data compiled by Bloomberg.
“Strength in gasoline prices has been limited to the New York Harbor area, an isolated area looking for supplies,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Cash prices in the rest of the country have been weakening substantially.”
Gasoline for January delivery advanced 4.53 cents, or 1.7 percent, to $2.7237 a gallon on the New York Mercantile Exchange, the highest settlement since Nov. 22. Trading volume was 3.3 percent below the 100-day average as of 2:47 p.m.
The EIA will report last week’s inventories at 10:30 a.m. tomorrow in Washington. The report will probably show U.S. gasoline stockpiles rose 1.25 million barrels, according to the median estimate of 10 analysts in a survey by Bloomberg.
“I’m expecting substantial builds in gasoline inventories over the next two weeks as refineries have all returned from their fall maintenance schedules,” Lipow said.
Futures widened gains when West Texas Intermediate surged to a one-month high after TransCanada Corp. said in a regulatory filing it plans to begin operating a crude pipeline from Cushing, Oklahoma, to Port Arthur, Texas, in January. The 700,000-barrel-a-day line will reduce inventories at Cushing, the delivery point for Nymex crude futures.
WTI for January delivery rose $2.22, or 2.4 percent, to $96.04 a barrel, the highest settlement since Oct. 31.
“The expectation is the glut at Cushing will start easing,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Gasoline’s crack spread versus West Texas Intermediate, a rough measure of refining profitability, narrowed 32 cents to $18.36 a barrel. The fuel’s premium to European benchmark Brent rose 73 cents to $1.78 a barrel.
The average U.S. pump price fell 0.5 cent to $3.263 a gallon, the sixth consecutive decline, Heathrow, Florida-based AAA said today.
The survey projected that supplies of distillates, including diesel and heating oil, declined 1.5 million barrels last week.
Ultra low sulfur diesel for January delivery gained 1.5 cents, or 0.5 percent, to $3.0651 a gallon, the highest settlement since Oct. 10. Volume was 2.6 percent below the 100- day average.
ULSD’s premium over WTI sank $1.59 to $32.69 a barrel. The crack spread versus Brent fell 54 cents to $16.11.
--Editors: David Marino, Bill Banker