Gasoline Slides a Second Straight Week as Supply Increases

May 09, 2014 4:08 pm ET

May 9 (Bloomberg) -- Gasoline futures in New York fell, recording a second consecutive weekly loss, as U.S. inventories of the motor fuel increased.

Prices fell 0.3 percent today and declined 1.6 percent this week. Gasoline stockpiles rose 1.61 million barrels to 213.2 million in the seven days ended May 2, the largest expansion since the week ended Jan. 17, according to Energy Information Administration data. Production jumped 4.3 percent.

“With the return of refiners from maintenance season I expect gasoline production to increase, which will pressure gasoline prices,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

June-delivery gasoline slipped 0.9 cent to settle at $2.896 a gallon on the New York Mercantile Exchange on volume that was 14 percent below the 100-day average as of 2:51 p.m. Prices have retreated 6.4 percent since reaching a year-to-date high of $3.0952 on April 22.

Futures also sank amid speculation that imports from Europe will rise in coming weeks. Shipments of gasoline in the week ended May 2 were 30 percent higher than two weeks earlier, when deliveries were at the lowest seasonal level since 1995, according to EIA data.

Nineteen tanker charters were completed or anticipated to arrive in New York in the next two weeks carrying oil products from Europe, a Bloomberg survey of five shipbrokers shows.

“We are tracking about 1 million barrels per day of gasoline imports into the east coast for the week ending May 9,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.

Gasoline’s crack spread versus WTI crude narrowed 11 cents to $21.64 a barrel. The motor fuel’s premium to Brent crude slipped 23 cents to $13.74.

Pump Price

The average U.S. pump price fell 0.2 cent to $3.663 a gallon, the 11th consecutive decline, according to data from Heathrow, Florida-based AAA today. Prices are 11.4 cents higher than a year ago.

Ultra low sulfur diesel for June delivery fell 1.34 cents, or 0.5 percent, to settle at $2.9068 a gallon on volume that was 31 percent below the average. Prices were down 0.5 percent this week, the third consecutive weekly decline.

Diesel’s crack spread versus WTI crude narrowed 29 cents to $22.10 a barrel. The motor fuel’s premium to Brent crude declined 41 cents to $14.20.