Gasoline fluctuated as investors waited to see if the U.S. Federal Reserve will announce more economic stimulus today.
Futures swung between gains and losses before the Federal Reserve’s scheduled 12:30 p.m. announcement in Washington. The Energy Department is scheduled to report last week’s oil inventories at 10:30 a.m. The industry-funded American Petroleum Institute reported yesterday that U.S. gasoline stockpiles rose 1.07 million barrels.
“People are waiting to see what the Fed announces and what the DOE report says,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Gasoline for July delivery slipped 0.3 cent to $2.6385 a gallon at 10:04 a.m. on the New York Mercantile Exchange. Prices swung between $2.6238 and $2.6539.
The Federal Reserve will probably decide today to expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists.
Fifty-eight percent of respondents in a June 18 poll said the Fed will prolong the program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio. The current program ends this month.
The Energy Department will probably report that stockpiles of gasoline and distillates each rose 1 million barrels last week, according to the median estimate in a Bloomberg survey.
Demand for the motor fuel in the week ended June 8 surged to the highest level since August. Gasoline supplies fell 1.72 million barrels last week to 201.8 million, according to department data.
‘The hope is if the Fed gives a jolt to the economy, it will give a jolt to energy demand,’’ said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “What we’re looking for in inventory side is gasoline demand starting to come back to life and we saw signs of that last week.”
Heating oil for July delivery rose 0.79 cent, or 0.3 percent, to $2.643 a gallon on the Nymex.
Regular gasoline at the pump, averaged nationwide, fell 1 cent to $3.487 a gallon yesterday, according to AAA. It was the lowest price since Feb. 7.
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