Gasoline Futures Slide to Two-Month Low as Supplies Seen Rising

Jan 14, 2014 3:45 pm ET

Jan. 14 (Bloomberg) -- Gasoline futures slid to the lowest level since November as supplies were poised to climb from a 10- month high following a week of bad weather that cut consumption.

Prices sank 0.4 percent. U.S. gasoline inventories probably gained 2.5 million barrels in the week to Jan. 10, according to the median estimate of 11 analysts surveyed by Bloomberg before an Energy Information Administration report tomorrow. Stockpiles jumped to the highest level since March and demand slid 7 percent in the week ended Jan. 3.

“Survey expectations are for gasoline inventories to build in the face of poor demand due to the weather last week keeping people at home,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for February delivery fell 1.17 cents to $2.6224 a gallon on the New York Mercantile Exchange on volume that was 6.1 percent below the 100-day average at 3:11 p.m. It’s the lowest settlement since Nov. 12.

Gasoline is down 5.9 percent this year, the worst- performing contract in the Standard & Poors GSCI index of 24 commodities.

The motor fuel’s crack spread versus West Texas Intermediate crude, a rough measure of refining profitability, narrowed by $1.28 to $17.55 a barrel. Gasoline’s premium to London-traded Brent crude fell 13 cents to $3.75.

Pump Price

The average U.S. pump price fell 0.4 cent to $3.308 a gallon, according to Heathrow, Florida-based AAA. Prices are down 1.5 cents this year.

Ultra low sulfur diesel for February delivery rose 0.3 cent to $2.9363 a gallon on volume that was 33 percent above the 100- day average. Prices were up 0.13 cent last week and have declined 4.6 percent this year.

U.S. distillate stocks climbed 5.83 million barrels in the week ended Jan. 3 to 125 million, the highest level in 11 weeks, EIA data show. The agency will probably report that distillate supplies rose 1.25 million barrels, according to the survey.

Diesel’s crack spread versus WTI narrowed 66 cents to $30.73 a barrel. The premium over European benchmark Brent increased 49 cents to $16.93.

--Editors: David Marino, Charlotte Porter