BLOOMBERG

 

Gasoline Rises to Five-Week High on Below-
Forecast Supply Gain

By Eliot Caroom and Barbara Powell - Feb 6, 2014


Gasoline climbed to a five-week high as an Energy Information Administration report yesterday
showed that stockpiles rose less than analysts expected after winter weather swept the U.S.
Northeast last week.


Prices advanced 1.6 percent. Gasoline inventories grew by 505,000 barrels last week, said the
EIA, the Energy Department’s statistical arm. Supplies were forecast to increase by 1.15 million,
according to the median estimate in a Bloomberg News survey.


“Gasoline may be supported by the fact that the inventory build yesterday was far less than the
market anticipated in light of the poor weather,” said Andy Lipow, president of Lipow Oil
Associates LLC in Houston.


March-delivery gasoline rose 4.17 cents to $2.683 a gallon on the New York Mercantile
Exchange, the highest settlement since Jan. 2. Trading volume was 22 percent above the 100-day
average as of 3:08 p.m.


Futures jumped the most in two weeks as refineries idled units for seasonal maintenance.


Phillips 66 is performing scheduled work at its Alliance plant in Louisiana, the company said
yesterday. Citgo Petroleum Corp. began shutting both plants at its Corpus Christi, Texas,
refinery yesterday for about 35 days of planned work, according to a person with knowledge of
the work today.


Spring Rally

“That Citgo story is ringing the bell for some people that maintenance season is in front of us and
we may have a long one,” said Gene McGillian, an analyst and broker at Tradition Energy in
Stamford, Connecticut. “And they’re saying the traditional gasoline spring rally will come after
and we might as well get on board for it.”


Gasoline’s discount to March ultra low sulfur diesel futures narrowed 4.34 cents to 31.21 cents a
gallon.


The motor fuel’s crack spread versus West Texas Intermediate, a rough measure of refining
profitability, widened $1.29 to $14.85 a barrel. Its premium to London-traded Brent crude
climbed 81 cents to $5.50.


The average U.S. pump price fell 0.2 cent to $3.27 a gallon, according to data from Heathrow,
Florida-based AAA. Prices are 27.6 cents below a year ago.


Ultra low sulfur diesel for March delivery fell 0.17 cent to $2.9951 a gallon on trading volume
that was 7.8 percent above the 100-day average.


Diesel’s crack spread versus WTI narrowed 53 cents to $27.95 a barrel. The premium over
European benchmark Brent fell $1.01 to $18.60.


To contact the reporters on this story: Eliot Caroom in New York at ecaroom@bloomberg.net;
Barbara Powell in Houston at bpowell4@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
®2014 BLOOMBERG L.P. ALL RIGHTS RESERVED.


FUTURES AND OPTIONS TRADING INVOLVE SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE
FOR EVERYONE. OPTIONS, CASH AND FUTURES MARKETS ARE SEPARATE AND DISTINCT AND DO NOT
NECESSARILY RESPOND IN THE SAME WAY TO SIMILAR MARKETS STIMULUS. A MOVEMENT IN THE
CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES & OPTIONS
CONTRACT BEING OFFERED. SEASONAL DEMAND AND CURRENT NEWS IN COMMODITIES ARE
ALREADY REFLECTED IN THE PRICE OF THE UNDERLYING FUTURES.