Feb. 2 (Bloomberg) -- Gasoline fell as U.S. demand for the motor fuel reached a 10-year low and supplies of the motor fuel rose to the highest level in 11 months.
Futures dropped 0.8 percent a day after the Energy Department reported that fuel supplied to wholesalers sank 1.6 percent last week to 7.97 million barrels a day, the lowest level since September 2001. Gasoline inventories rose 3.02 million barrels last week to 230.1 million.
“We are in February and driving demand is really low,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “You’re getting some technical selling. It looks like the market couldn’t push up past $2.90 and hold there.”
Gasoline for March delivery fell 2.33 cents to settle at $2.8689 on the New York Mercantile Exchange.
Prices briefly rose to $2.8986 after Federal Reserve Chairman Ben S. Bernanke said the economy has shown signs of improvement.
“Fortunately, over the past few months, indicators of spending, production, and job-market activity have shown some signs of improvement,” Bernanke said today, according to prepared testimony to the House Budget Committee in Washington. “The outlook remains uncertain, however, and close monitoring of economic developments will remain necessary.”
Bernanke repeated the Federal Open Market Committee’s Jan. 25 statement that the outlook for the economy would likely warrant near-zero interest rates through at least late 2014. The FOMC also established an inflation goal of 2 percent, achieving Bernanke’s longstanding aim to reduce “public uncertainty” about monetary policy.
Demand for the motor fuel over the past four weeks was 7.3 percent below a year earlier. Total fuel consumption was down 4.3 percent year-over-year.
“Bernanke’s announcement gave us a little bit of support,” Phil Flynn, analyst at PFGBest in Chicago, said by phone. “But right now as far as energy demand we need more than Goldilocks, we need some strong growth, especially over the next couple of weeks as we head into the shoulder season with a whole bunch of supply.”
March-delivery heating oil gained 0.74 cent to $3.0529 a gallon on the exchange.
Regular gasoline at the pump, averaged nationwide, rose 0.5 cent to $3.455 yesterday, according to AAA data.
--With assistance from Joshua Zumbrun; Editors: David Marino, Richard Stubbe
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