Bloomberg News

Gasoline Advances on U.S. Jobs Data, Report Inventories Fell

October 05, 2011

Oct. 5 (Bloomberg) -- Gasoline gained after reports that U.S. companies added jobs last month and that inventories of the motor fuel fell for the first time in five weeks.

Futures rose as ADP Employer Services reported that the U.S. firms increased employment by 91,000, more than the 75,000 median forecast of economists surveyed by Bloomberg News. Gasoline widened gains after the Energy Department reported that stockpiles declined 1.14 million barrels to 213.7 million.

“What’s bullish is that across the board, we had draws in crude, gasoline and distillate inventories,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Gasoline for November delivery increased 8.08 cents, or 3.3 percent, to settle at $2.5692 a gallon on the New York Mercantile Exchange.

Demand, or deliveries to wholesalers, was little changed in the period ended Sept. 30 at 8.96 million barrels a day. On a four-week average, consumption was 1.7 percent below a year earlier.

“Gasoline demand continues to be down,” Lipow said.

Imports of gasoline to the East Coast, where the futures contract is settled, fell 124,000 barrels to 397,000 barrels a day last week, according to the Energy Department. It’s the lowest level since at least 2004, when the department began showing regional data.

“Since 2004 refinery gasoline production has increased, the use of ethanol has increased, while gasoline demand” has slowed, Lipow said.

IMF Plans

Futures were bolstered as the International Monetary Fund said that European Union officials are working on plans to boost bank capital to contain the euro-region’s debt crisis. If European leaders can’t contain Greece’s debt crisis, fuel demand and the global economic recovery may be threatened.

“The story that European officials are working on a plan to boost bank capital makes the market feel a little bit better,” Flynn said. “But the market is very nervous. We’re grasping at straws here.”

Supplies of heating oil and diesel declined 744,000 barrels to 156.9 million, a four-week low.

Demand for industrial, trucking and home-heating fuels rose 282,000 barrels to 4.1 million barrels a day, the highest level since April 15. On a four-week average, consumption was 2 percent higher than a year earlier.

Heating oil for November delivery gained 5.32 cents, or 2 percent, to $2.7766 a gallon.

Regular gasoline at the pump, averaged nationwide, fell 0.9 cent to $3.399 yesterday, according to AAA data. That’s the cheapest since March 1.

--With assistance from Robert Willis and Sho Chandra in Washington, Rebecca Christie in Brussels, Chiara Vasarri in Milan and Paul Burkhardt in New York. Editors: David Marino, Charlotte Porter

To contact the reporter on this story: Barbara J Powell in Dallas at

To contact the editor responsible for this story: Dan Stets at

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