Already a Bloomberg.com user?
Sign in with the same account.
Oct. 31 (Bloomberg) -- Gasoline slipped to a three-week low as the dollar surged on concern that European governments will struggle to obtain financial support for a plan to resolve the region’s debt crisis.
Futures fell 1.5 percent as a stronger U.S. currency lessened the investment appeal of commodities priced in dollars. European governments are getting resistance as they seek to use this week’s Group of 20 summit to find support for their revamped crisis-fighting strategy.
“The much stronger dollar is causing people to sell,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “We went up rapidly on the euphoria that everything in Europe was going to be resolved and now people are having second thoughts that the implementation will do less than what is hoped.”
Gasoline for November delivery sank 3.93 cents to settle at $2.6429 a gallon on the New York Mercantile Exchange, the lowest settlement since Oct. 5. Prices rose 0.6 percent in October after falling the previous two months.
The more actively traded December contract dropped 4.04 cents, or 1.5 percent, to settle at $2.6057. November gasoline and heating oil contracts expired today.
Gasoline’s loss was part of a broader decline in commodities and equities today. The S&P GSCI Index of 24 raw materials fell 0.7 percent at 3:02 p.m. in New York and the Standard & Poor’s 500 stock index retreated 1.4 percent.
“We had a pretty incredible month, and we’re seeing some month-end profit-taking from some of the funds, some reaction from the dollar and concern we don’t know exactly how the European bailout will be funded,” said Phil Flynn, vice president of research at PFGBest in Chicago.
The ICE Futures’ dollar index, which tracks the currency against the currencies of six major U.S. trading partners, including the euro and the yen, increased 1.5 percent at 3:03 p.m. in New York. The euro slid 1.6 percent against the dollar, after rising 1.8 percent last week, as China’s official Xinhua News Agency said the nation can’t play the role of “savior” to Europe.
The yen slumped 3 percent against the dollar as Japan sought to weaken the yen for the third time this year after its gains to a postwar record threatened exporters.
“The Japanese intervention got the ball rolling overnight and we’re seeing end-of-the month selling,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
November-delivery heating oil declined 1.63 cents, or 0.5 percent to settle at $3.0429 a gallon on the exchange. Prices rose 8.9 percent in October, the biggest monthly gain since December. The December contract fell 0.81 cent, or 0.3 percent, to $3.0583 a gallon.
The spread between heating oil and gasoline widened 2.3 cents to 40 cents a gallon, the largest difference for the contracts closest to expiration since January 2009.
Regular gasoline at the pump, averaged nationwide, fell 0.3 cent to $3.443 a gallon yesterday, according to AAA data.
--With assistance from Aki Ito in Tokyo, Simon Kennedy in Paris and Sandrine Rastello in Washington. Editors: David Marino, Bill Banker
To contact the reporter on this story: Barbara J Powell in Dallas at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org