THE WALL STREET JOURNAL

 

Demand Fuels Gasoline

By BRETT PHILBIN - Nov. 20, 2013 8:37 p.m. ET

 

Gasoline and diesel prices rose Wednesday after government data showed strong demand for the
petroleum products for this time of year, while stockpiles fell more than expected last week.
Gasoline futures for December delivery settled 2.35 cents, or 0.9%, higher at $2.6630 a gallon on the New
York Mercantile Exchange. New York Harbor ultralow-sulfur diesel for December gained 4.87 cents, or
1.7%, to $2.9545 a gallon.

 

The amount of crude distillates, such as diesel and heating
oil, stored in the U.S, fell by 4.8 million barrels in the week
ended Nov. 15, according to the Energy Information
Administration.


Analysts polled by The Wall Street Journal had predicted a
decline of only 500,000 barrels.


In the same week, implied demand for distillate fuel rose 14%
from the previous week to 4.3 million barrels. It was a sixyear
high for that week in November. Refiners have been
producina large amounts of diesel for export to Europe and
Latin America, where it is more widely used.


"Demand for distillates was pretty high last week, and even
though gasoline demand dipped below 9 million barrels a
day, its unseasonably high for this time of year," said Carl
Larry, president of Oil Outlooks and Opinions, a trading
newsletter.


Gasoline use in the U.S. usually tapers in November as earlywinter
weather in some parts of the country keeps motorists
off the road.

 

Stockpiles of gasoline fell by 345,000 barrels last week, more than the 100,000-barrel decline analysts had
expected.


The amount of crude oil in storage also ran counter to expectations. rising by only 375.000 barrels instead
of the 700,000-barrel increase analysts had predicted.

 

But U.S. oil prices ended Wednesday's trade slightly lower, after minutes of the Federal Reserve's October
meeting indicated central bank officials expect to begin scaling back a major economic-stimulus program in
coming months.


The Fed's $85 billion-a-month bond-buying program has helped lift crude prices by weakening the dollar,
making oil less expensive to buy with other currencies.


"I thought we'd make a push higher, but the Fed minutes really put a damper on things," said Tom Reilly,
an options trader at SCS Commodities in New York.


Light, sweet crude for December delivery, which expired Wednesday, fell 1 cent to $93.33 a barrel on the
New York Mercantile Exchange. The more actively traded January contract declined 4 cents to $93.85 a
barrel.


—David Bird contributed to this article.
Write to Brett Philbin at brett.philbinwsi.com
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