Gasoline advanced to a 16-week high as Brent crude strengthened and a rise in U.S. jobless claims fueled speculation that the Federal Reserve will move to stimulate economic growth.
Futures climbed as Brent, which underpins the price of imported crude and gasoline, gained versus West Texas Intermediate oil. Weekly applications for unemployment benefits increased to a one-month high, a Labor Department report showed. The minutes from the most recent Federal Reserve meeting indicated policy makers are supportive of more easing soon.
“Brent is moving higher,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Disappointing economic numbers seem to reinforce the idea that more stimulus is coming.”
September-delivery gasoline rose 1.83 cents, or 0.6 percent, to $3.1225 a gallon at 10:03 a.m. on the New York Mercantile Exchange. Prices touched $3.1503, the highest intraday level for the front-month contract since April 30. The more actively traded October contract gained 2.13 cents to $2.9595.
Brent’s premium to WTI widened to 65 cents to $18.30 a barrel. Brent for October settlement advanced 93 cents to $115.84 a barrel on the ICE Futures Europe exchange.
Jobless claims increased by 4,000 to 372,000 in the period ended Aug. 18, Labor Department figures showed.
Many Fed members “judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the Fed’s July 31-Aug. 1 gathering released yesterday in Washington.
The Federal Open Market Committee, the Fed’s policy-making arm, next meets on Sept. 12-13.
Heating oil for September delivery rose 1.92 cents, or 0.6 percent, to $3.1479 a gallon, after touching $3.16, the highest intraday price since May 2. October heating oil gained 1.85 cents to $3.1557.
Regular gasoline at the pump, averaged nationwide, rose 0.2 cent to $3.718 gallon yesterday, AAA data showed. Prices have climbed 39.2 cents since July 1, according to data from the nation’s largest motoring organization.
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