BLBG: Gasoline Falls on Speculation Stockpiles Rose, Demand Shrank
By Barbara Powell
Sept. 23 (Bloomberg) -- Gasoline futures fell before a government report that may show U.S. stockpiles rose last week amid reduced demand after the end of the summer driving season.
The industry-funded American Petroleum Institute said yesterday that gasoline supplies increased 3.8 million barrels last week. The Energy Department is scheduled to report on inventories at 10:30 a.m. today in Washington.
“The demand for gasoline obviously falls off a great deal now, and the fundamentals are overwhelmingly bearish,” said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida.
Gasoline for October delivery dropped 2.76 cents, or 1.6 percent, to $1.754 a gallon at 9:40 a.m. on the New York Mercantile Exchange.
Wholesale gasoline demand in the week ended Sept. 11 dropped 3 percent to the lowest level in five weeks, the Energy Department reported Sept. 16. Gasoline inventories rose 547,000 barrels, or 0.3 percent, to 207.7 million.
Gasoline stockpiles probably rose 500,000 barrels last week, according to the median estimate of 18 analysts in a survey by Bloomberg News.
The premium of gasoline over crude oil, or the crack spread, based on the November futures contracts, dropped about 55 cents to $3.12 a barrel.
Distillate Supplies
Supplies of distillates, including heating oil and diesel, probably rose 1.45 million barrels from a 26-year high, according to the survey.
Distillate supplies fell 1.9 million barrels last week, API reported yesterday.
October-delivery heating oil declined 0.13 cent to $1.8108 a gallon. The crack spread, based on November contracts, strengthened about 54 cents to $6.21 a barrel.
“It’s simply seasonality that people are buying heating oil,” Cordier said. “It’s the only play for investors right now.”
Regular gasoline at the pump, averaged nationwide, fell 0.4 cent to $2.54 a gallon, AAA, the nation’s biggest motoring organization, said today on its Web site. That’s the lowest since Aug. 1.
To contact the reporter on this story: Barbara J. Powell in Dallas at bpowell4@bloomberg.net
