BLOOMBERG

 

Gasoline Rises to Three-Month High as GDP Growth Supports Demand

By Barbara Powell - Dec 20, 2013

 

Gasoline jumped to a three-month high as the U.S. economy expanded at a faster rate than
previously estimated, indicating fuel demand may increase.


Futures are heading for a weekly increase of 5.2 percent percent, the largest since July. Gross
domestic product climbed at a 4.1 percent annualized rate in the third quarter, the strongest since
the final three months of 2011 and up from a previous estimate of 3.6 percent, Commerce
Department figures showed today.


"The market is seeing more economic evidence that is supportive of higher petroleum product
demand," said Andy Lipow, president of Lipow Oil Associates LLC in Houston.


Gasoline fof January delivery rose 3.32 cents, or 1.2 percent, to $2.7733 a gallon ai 9:11 a.m. on the
New York Mercantile Exchange and touched $2.7783, the highest intraday level since Sept. 13.
Trading volume was 35 percent above the ioo-day average for the time of day.


Futures have risen every day this week in the longest rally since June 7 and are up 3.3 percent this
month.


The motor fuel's crack spread versus West Texas Intermediate, a rough measure of refining
profitability, widened $1.40 to $17.73 a barrel. Gasoline's premium to Brent increased 54 cents to
$5.67 a barrel.


Gasoline and ultra-low diesel also rose as a French refinery strike has idled four of Total SA's five
plants in that country. The strike over workers' pay, which freezes about 700,00o barrels a day of
crude processing capacity, entered its eighth day today.


French Exports
"The French strike is resulting in less gasoline available for export from Europe while increasing
the diesel import demand," Lipow said.

 

The average U.S. pump price rose 1 cent to $3.222 a gallon, the first increase in 12 days, according
to data from Heathrow, Florida-based AAA.


ULSD for January delivery gained 2.1 cents, or 0.7 percent, to $3.o516 a gallon on trading volume
that was 20 percent above the 100-day average.


ULSD's crack spread versus WTI widened 99 cents to $29.01 a barrel. The premium versus Brent
rose 17 cents to $16.95 a barrel.


To contact the reporter on this story: Barbara Powell in Houston at bpowell4Pbloomberg.net
To contact the editor responsible for this story: Dan Stets at dstetsPbloomberg.net
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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.