Bloomberg News

Gasoline Futures Rise as Record Prices in Europe Deter Exports

April 03, 2012

Gasoline rose as prices in Europe increased to a record, weakening the incentive to export cargoes of the motor fuel to the U.S.

Futures advanced as Eurobob gasoline traded at $1,220 a metric ton for immediate loading in the Amsterdam-Rotterdam- Antwerp area, according to a survey of brokers and traders monitoring the Argus Bulletin Board. It’s the highest price for the grade, which was introduced in 2010, according to data compiled by Bloomberg.

“The Europeans haven’t been in a hurry to send gasoline over here,” because prices have been strong, said Phil Flynn, vice president of research at PFGBest in Chicago. “Supply is going to go where the prices are.”

Gasoline for May delivery advanced 1.32 cents, or 0.4 percent, to settle at $3.3954 a gallon on the New York Mercantile Exchange. Prices have risen 26 percent this year, the best-performing contract in the Standard & Poor’s GSCI index of 24 commodities.

Futures pared gains after minutes from a Federal Reserve meeting showed the bank is holding off on increasing monetary accommodation unless the U.S. economy falters or prices rise more slowly than the central bank’s target.

Total gasoline imports to the U.S. East Coast dropped 16 percent from a week earlier to 496,000 barrels a day in the seven days ended March 23, Energy Department data show. It’s the lowest level for this time of year in at least a decade.

Prices in Europe are rising as supplies have tightened in ARA, the trading hub for Northwest Europe. Inventories were 650,000 metric tons as of March 29, 25 percent below a year earlier, PJK International BV data show. At least seven refineries have been put up for sale in Europe, including four of Petroplus Holding AG’s five plants.

Stockpiles Drop

Total U.S. gasoline inventories probably dropped last week, losing 1.4 million barrels to a 13-week low, according to the median estimate of 11 analysts in a survey by Bloomberg News. Distillate supplies fell 500,000 barrels, according to the survey.

Futures also rose as Brent oil, the benchmark for European and West African cargoes used by refiners in Europe and the U.S. East Coast, gained versus West Texas Intermediate. The premium of May Brent on the ICE Futures Europe exchange over WTI traded on Nymex widened for a fifth straight day to $20.85 a barrel, the most since Oct. 21.

May-delivery heating oil fell 2.21 cents, or 0.7 percent, to $3.2275 a gallon on the Nymex. Prices have risen 10 percent this year.

Regular gasoline at the pump, averaged nationwide, slipped 0.2 cent yesterday to $3.923, according to AAA, the nation’s biggest motoring club. It was the first drop in more than three weeks. Prices have gained 20 percent this year, and are 7.6 percent above a year ago.

To contact the reporter on this story: Paul Burkhardt in New York at pburkhardt@bloomberg.net.

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


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