Bloomberg News

Gasoline Gains as U.S. Consumer Confidence at Six-Month High

December 12, 2011

Dec. 9 (Bloomberg) -- Gasoline advanced for the first time in three days as a gauge of U.S. consumer confidence surged this month to a six-month high and equities climbed.

Gasoline gained as the Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 67.7 from 64.1 at the end of November. This follows a report yesterday that jobless claims fell last week to the lowest since February. The Standard & Poor’s 500 Index was up 1.7 percent today.

“The consumer number is why equities are having a small rally,” said Fred Rigolini, vice president of Paramount Options Inc. in New York. “Gasoline is reacting to that and the positive news from the U.S.”

Gasoline for January delivery rose 2.95 cents, or 1.2 percent, to settle at $2.5961 a gallon on the New York Mercantile Exchange. Prices slipped 0.8 percent this week and have gained 5.8 percent in 2011.

In another report today, Commerce Department figures showed that the trade deficit narrowed in October to the lowest level of the year, reflecting a drop in imports that will help boost the economy.

Regular gasoline at the pump, averaged nationwide, fell 0.2 cent to $3.293 a gallon yesterday, according to AAA data.

Heating oil slipped on concern that that the euro-area economy will falter and curtail diesel fuel demand.

Europe Summit

European leaders attending a summit on the region’s fiscal crisis agreed to boost a rescue fund by $267 billion (200 billion euros) and tighten rules to curb future debts.

“The oil market is skeptical how this agreement is going to be implemented,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “Significant austerity would impact fuel demand and Europe is really a distillate-run economy.”

About half of U.S. diesel and heating oil exports in September went to Europe, Energy Department data show.

German exports fell in October from the prior month, according to the Federal Statistics office in Wiesbaden today, reinforcing concerns that the euro region may slip into recession. French industrial production was flat in October, Paris-based statistics office Insee said. Germany and France are the region’s largest economies.

January-delivery heating oil declined 1.73 cents, or 0.6 percent, to settle at $2.9125 a gallon on the exchange. Prices sank 2.6 percent this week and are up 15 percent this year.

--With assistance from Gonzalo Vina in London, Simon Kennedy and James G. Neuger in Brussels, Bob Willis in Washington and Jeff Black in Frankfurt. Editors: David Marino, Richard Stubbe

To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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