Dec. 18 (Bloomberg) -- Gasoline rose for a third day as the Energy Information Administration reported that supplies along the U.S. East Coast fell last week amid lower imports and higher demand.
Gasoline stockpiles in PADD I, which includes New York Harbor, the delivery point for futures contracts, declined 1.4 percent and imports slipped 15 percent. Nationwide, demand jumped 8 percent last week and over the past four weeks is up 3.7 percent from a year ago.
“It’s a New York delivery, you had a draw in PADD 1 and imports are down,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Look at the four-week average for demand. You can’t ignore these numbers.”
Gasoline for January delivery rose 5.01 cents, or 1.9 percent, to settle at $2.6973 a gallon on the New York Mercantile Exchange. Trading volume was 3.4 percent below the 100-day average as of 4:13 p.m.
Prices pared gains briefly after the Federal Reserve Open Market Committee said today that the central bank will cut monthly bond purchases to $75 billion from $85 billion “in light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions.” U.S. stocks indexes rallied to record highs after the statement was released at 2 p.m. in Washington.
“The Fed is saying the economy is improving and this goes hand in hand with it,” Lebow said. “We are seeing a firming in petroleum demand.”
The motor fuel’s crack spread versus West Texas Intermediate, a rough measure of refining profitability, widened $1.52 to $15.49 a barrel. Gasoline’s premium to Brent gained 87 cents to $4.09 a barrel.
The average U.S. pump price fell 0.6 cent to $3.216 a gallon, the 10th consecutive decline, Heathrow, Florida-based AAA said today. Prices are the lowest since Nov. 19.
Supplies of distillates, including diesel and heating oil, fell 2.11 million barrels to $116 million. PADD 1 distillate supplies declined 1.24 million barrels to 36.5 million.
ULSD for January delivery gained 4.72 cents, or 1.6 percent, to $3.0101 a gallon on volume that was 15 percent above the 100-day average.
“Some of this is a reaction just on what the stock market is doing, and the products were trying to lead the market this morning after the big drawdown in distillates,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania.
ULSD’s crack spread versus WTI widened $1.40 to $28.62 a barrel. The premium versus Brent rose 70 cents to $16.66 a barrel.
--Editors: David Marino, Charlotte Porter