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Gasoline rose after a gauge of American service-industry growth climbed in May and on speculation that lower pump prices will improve demand.
Futures rose as the Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the economy, increased to 53.7 in May from the prior month’s 53.5. Gasoline at the pump is down 9.3 percent since reaching a 2012 high of $3.936 on April 4, according to data from AAA, the largest U.S. motoring club.
“The combination of the season and sharply lower prices should give a boost in demand,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Gasoline for July delivery rose 1.4 cents, or 0.5 percent, to settle at $2.6847 a gallon on the New York Mercantile Exchange.
The median forecast of 75 economists surveyed by Bloomberg News projected the ISM would be 53.4. Readings above 50 signal expansion.
“The ISM has provided some support for prices,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Regular gasoline at the pump, averaged nationwide, fell 1.5 cents to $3.57 a gallon yesterday, according to AAA. It was the lowest price since Feb. 20.
U.S. gasoline demand slid 3.7 percent last week, the first decline in four weeks, as Americans used less fuel during the Memorial Day holiday weekend, MasterCard’s SpendingPulse report showed today.
For the Memorial Day holiday weekend, from May 25 through May 28, drivers pumped 1.7 percent less gasoline than the same holiday period in 2011, the report showed.
In Europe, finance ministers and central bank governors from the world’s leading economies agreed to coordinate their response to the region’s financial crisis.
Group of Seven officials said they will work together to help both Spain and Greece place their public finances on a sustainable footing, Japanese Finance Minister Jun Azumi told reporters in Tokyo following the call today.
“The market is still going to wait to see what’s going to happen in Europe,” Lipow said. That’s the big story.’’
Euro-area services and manufacturing output contracted at the fastest pace in almost three years in May, adding to indications the sovereign debt crisis is weakened the region’s economy. A composite index based on a survey of purchasing managers in manufacturing and services dropped to 46 from 46.7 in April, London-based Markit Economics said today.
July-delivery heating oil rose 0.67 cent to settle at $2.6336 a gallon on the exchange.
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