Gasoline retreated from a nine-month high after a Saudi Arabian official late yesterday said there was no sabotage of any oil facility, following reports of a fire in a pipeline.
Futures fell after Major General Mansour Al-Turki, a spokesman for the Interior Ministry, said that no pipeline or refinery had been damaged. Gasoline surged 2.9 percent yesterday after the fire was reported, first-time U.S. jobless claims matched a four-year low from two weeks ago, and the U.S. escalated warnings to Iran about its nuclear program.
“The Saudis announced they didn’t have any pipeline sabotage and that took some air out of prices,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “But it does show how worried the market is about sabotage throughout the Middle East.”
Gasoline for April delivery fell 5.84 cents, or 1.7 percent, to $3.2933 a gallon at 10:47 a.m. on the New York Mercantile Exchange. Prices touched $3.3868 yesterday after the close of floor trading. Gasoline is up 23 percent this year.
Brent oil for April settlement fell 1.4 percent to $124.49 a barrel on the London-based ICE Futures Europe Exchange.
Gasoline’s decline mirrored a broader retreat in commodities as the dollar rose against the euro, reducing the investment appeal of raw materials. The Standard & Poor’s GSCI Index (SPGSCI) sank 0.9 percent at 10:46 a.m. in New York as the U.S. currency advanced 0.8 percent against the euro.
“There’s the fact the Saudi rumors were completely untrue, and with a relatively strong dollar and lower stock markets, you’re seeing end-of-the-week profit taking,” said Fred Rigolini, vice president of Paramount Options Inc. in New York.
Futures also declined as gasoline deliveries to wholesalers slipped 3.1 percent last week and consumption over the past four weeks was 6.7 percent below a year earlier, according to Energy Department data.
Demand has fallen as prices at the pump are rising. Regular gasoline (3AGSREG) at the pump, averaged nationwide, rose 0.3 cent to $3.741 a gallon yesterday, according to AAA data. Prices have increased 14 percent this year, and are 10 percent higher than a year earlier.
“You’re still looking at sluggish product demand,” Rigolini said.
April-delivery heating oil declined 5.47 cents, or 1.7 percent, to $3.2206 a gallon on the exchange. Prices have risen 9.7 percent this year.
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