WASHINGTON -- Gasoline rose to a seven-week high after U.S. stockpiles of the motor fuel declined unexpectedly last week, reported Bloomberg.
Futures climbed 1.4% as gasoline supplies fell 1.82 million barrels to 205.9 million in the seven days ended July 13, the first drop in five weeks, U.S. Department of Energy data showed. The median estimate of 10 analysts surveyed by Bloomberg called for a 1.2 million-barrel increase.
"It was a pretty big decline and it was unexpected," Andy Lipow, president of Lipow Oil Associates LLC, Houston, told the news agency.
August-delivery gasoline gained 3.84 cents to $2.8834 a gallon on the New York Mercantile Exchange, the highest settlement since May 29.
The largest portion of the inventory decline occurred in PADD 1, which includes New York Harbor, the delivery point for the Nymex contract. PADD 1 gasoline stockpiles fell 1.2 million barrels to an eight-month low of 52.2 million, 6.2% below a year earlier.
"People are worried about the drop in PADD 1, and lower inventories there can make futures prices rise," Hamza Khan, an analyst at the Schork Group Inc., a Villanova, Pa., consulting company, told Bloomberg.
East Coast supplies of reformulated gasoline (RBOB), rose 643,000 barrels to 15.3 million. Inventories of the fuel are 9.2% below a year earlier, wider than the 8.8% difference the prior week.
Gasoline demand slipped to 8.63 million barrels a day, the lowest level since April 20. Consumption over the past four weeks was 3.3% below a year earlier.
"People are ignoring the demand figure and looking at the supply constriction," Sander Cohan, a global transportation fuels analyst and principal with Energy Security Analysis Inc., Wakefield, Mass., told the news agency.
Futures rose before the inventory report as equities strengthened and housing starts increased 6.9% in June to the highest level in almost four years, Commerce Department data showed.
"We did get a bigger draw than people were expecting, equities were higher and housing starts were better than expected," Gene McGillian, an analyst and broker at Tradition Energy, Stamford, Conn., told Bloomberg.
Heating oil and diesel supplies rose 2.62 million barrels to 123.5 million in the week ended July 13. Analysts in the survey forecast a 1.3 million-barrel gain. Inventories are 17% below a year earlier, according to department data.
Distillate demand increased 3.8% to 3.37 million barrels a day. Consumption over the past four weeks was 1.9% higher than a year earlier.
Heating oil for August delivery advanced 3.54 cents, or 1.3%, to $2.8776 a gallon, a nine-week high.
Regular gasoline at the pump, averaged nationwide, increased two cents to $3.426 a gallon, according to AAA. Prices have risen every day but two since July 1, gaining 10 cents. Gasoline reached a year-to-date high of $3.936 on April 4.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.