Gasoline Falls Most in Three Weeks on Speculation Supply to Rise

Apr 25, 2014 3:40 pm ET

April 25 (Bloomberg) -- Gasoline fell the most since April 1 amid speculation that supplies will increase as refineries return from maintenance and produce more fuel.

Prices slipped 0.5 percent, the third straight decline. Refineries processed the most crude since Jan. 3 last week, Energy Information Administration data show, indicating that gasoline output is poised to rise. Plants ran at 91 percent of capacity, up from 83.5 percent a year earlier.

“Refineries are increasing their utilization rates and will put more product out on the market,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

May-delivery gasoline fell 1.44 cents to $3.0751 a gallon on the New York Mercantile Exchange. Prices rose 0.7 percent this week and are up 5.6 percent this month. Volume was 17 percent above the 100-day average as of 2:56 p.m.

Gasoline supplies slipped 274,000 barrels last week to 210 million last week, less than the 1.65 million reduction projected in a Bloomberg survey.

Stockpiles in PADD 1B, which includes New York Harbor, the delivery point for Nymex futures, rose 55,000 barrels to 28.9 million, the first increase in four weeks.

“There’s the sense refineries have turned the corner on seasonal maintenance and we’ll probably start to see supplies build next week,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Pump Price

The average U.S. pump price increased 0.8 cent to $3.693 a gallon, the highest in 13 months, according to data from Heathrow, Florida-based AAA. Prices are 18.1 cents higher than a year ago.

Gasoline’s crack spread versus West Texas Intermediate widened 56 cents to $26.52 a barrel. The motor fuel’s premium to Brent crude fell 3 cents to $17.54. The spreads are based on June contracts.

Diesel retreated amid higher supply as refineries boosted production. Stockpiles of distillates, including diesel and heating oil, rose 597,000 barrels last week to 112.5 million. The survey projected a decline of 300,000 barrels.

Ultra low sulfur diesel for May delivery fell 2.79 cents, or 0.9 percent, to $2.9866 a gallon on volume that was 33 percent below the 100-day average. The contract is up 1.9 percent in April. Prices dropped 0.7 percent this week, the first decline in three weeks.

Diesel’s crack spread versus WTI added 14 cents to $24.60 a barrel. The premium to Brent dropped 45 cents to $15.62.