Gasoline fell on concern that a report tomorrow will provide more evidence that China’s growth is slowing and as Spain is poised to become the fourth of the 17 euro countries to require emergency assistance.
Futures fell as China is scheduled to report inflation, investment and output tomorrow after cutting interest rates for the first time since 2008. Fitch downgraded Spain to BBB, within two steps of junk. Remarks that U.S. Federal Reserve Chairman Ben S. Bernanke made to Congress yesterday raised doubts that the Fed would institute a third round of quantitative easing to boost the U.S. economy.
“The expectation is that the report from China will show growth slowing more than expected,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “You have Bernanke’s comments in conjunction with China and the sense that economic growth is slowing down around the world.”
Gasoline for July delivery fell 3.75 cents, or 1.4 percent, to $2.6475 a gallon at 9:49 a.m. on the New York Mercantile Exchange.
A bid for help from Spain may come as soon as tomorrow when euro finance ministers hold a conference call, said a German government official and a European Union aide, each of whom declined to be identified because the matter is confidential.
Bernanke told lawmakers yesterday that further rounds of stimulus could boost the economy, yet may have “diminishing returns.” He said the central bank has options for further easing while declining to specify them. He also said the economy is at risk from the European debt crisis and the prospect of fiscal tightening.
“Bernanke started the ball rolling downhill,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Today’s drop seems compounded by growing fears Spain will ask for aid and that more bad news is coming out of China.”
Regular gasoline at the pump, averaged nationwide, fell 0.5 cent to $3.555 a gallon yesterday, according to AAA. That’s the lowest price since Feb. 17.
July-delivery heating oil fell 1.89 cents, or 0.7 percent, to $2.6482 a gallon on the exchange.
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